According to DMCC's new special edition Future of Commerce 2021 research titled, ‘Disobeying forecasts and driving the post-pandemic economic recovery,' global trade will rebound in 2021 after displaying unexpected endurance in 2020 amid the economic hurdles presented by the pandemic.

The analysis, which was recently issued, emphasized two significant global and regional takeaways: First and foremost, international trade will sustain solid global economic growth in 2021 and beyond, with the economies of the United States and China taking the lead. This rise has defied projections of double-digit yearly decreases, which have been projected by the World Trade Organization to range between 13 and 32%.

Second, amid the economic obstacles provided by the COVID-19 epidemic, Dubai, a major commercial center, had its international trade growth rebound strongly in 2020, with the second half of 2020 witnessing a fairly strong year-on-year increase in trade volumes of 6%. Yearly, Dubai's total export values increased by 8% in 2020.

“In 2020, the prognosis for global commerce was dismal as the globe struggled to contend with the consequences of the pandemic,” said Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of DMCC. The scenario is significantly brighter now, as indicated by the conclusions of our most recent Special Edition Future of Trade - 2021 research. However, while global commerce has demonstrated its endurance, it is also undergoing a fundamental transformation. Technology, changing consumer habits, the need to battle climate change, and geopolitics will all play an important role in its transformation in the coming years. In this setting, our study makes several concrete suggestions to governments and companies seeking to negotiate this new terrain and hasten pandemic recovery.”

According to the study, technology is the most transformational component of the global trade picture. Blockchain, decentralized financing (DeFi), and other innovative and disruptive technologies will help to boost trade growth even more. DeFi protocols, for example, have seen a significant amount of funding put on them. Since the beginning of 2021, the entire value locked inside DeFi has more than tripled, from around $20 billion to $60 billion. As digital infrastructures expand, they will accelerate a game-changing change in commerce from national to global levels.

Feryal Ahmadi, Chief Operating Officer, DMCC, commented on the release of the Special Edition study, saying, "Following a hard and unpredictable time, the data offered in our Future of Trade research supports a positive view." Global commerce has outperformed all forecasts and will continue to support global economic development. While geopolitics may continue to provide issues and have an influence on the global trading network, technological adoption will keep going to determine the future of trade. A major trend in the recent year was also the shift of governments, corporations, and investors toward more sustainable practices in international commerce, which would be currently high on the priority list. In the end, the research reiterates, in keeping with our previous results, that international coordination and collaboration, and technology, remain the essential facilitators and accelerators of the recovery.”

On the geopolitical front, worries of protectionist measures linger, fueled by persistent trade disputes between the United States and China, increasing economic nationalism, and the expanding economic imbalance between low- and middle-income nations. In addition, in a significant development for sustainability and worldwide trade, the EU's push to implement a carbon pricing practice under the anticipated Carbon Border Adjustment Mechanism (CBAM), or "Carbon Pricing," has been rebuked as a form of protectionism, with the potential to exacerbate existing geopolitical frictions. The results suggest that, while a "new age of protectionism" is a significant possibility in the aftermath of the pandemic and increased debates about US-China decoupling, outright protectionism would be avoided since it is costly, unexpected, and has a negative impact on jobs. Economic nationalism, on the other hand, is more plausible.

While some feared that now the epidemic would push sustainability to the bottom of the political and business agendas that will not be the case. Rather, China, Japan, the US, South Korea, and Canada have established more ambitious net-zero ambitions.

The Future of Trade research provided many significant suggestions to industry and government: To combat young unemployment and underemployment throughout the recovery, governments must broaden their global trade partnerships to support economic transformation for job-intensive growth. Businesses and governments alike must stay adaptable and imaginative to handle continued market turbulence and capitalize on exceptional possibilities generated from the epidemic.