Recent global crises have exposed the brittle nature of supply chains. On the eve of the 2023 OECD Ministerial Meeting for Responsible Business Conduct, Minister Nigel Huddleston (UK), discusses the importance of securing diversified and resilient global supply chains.
The global economy is more interconnected than ever and our supply chains are the backbone to the modern globalised world. Yet recent crises, in particular the COVID-19 pandemic, have exposed their fragility and paralysed global trade, leading to significant supply chain disruption.
The increased imposition of trade barriers and a worldwide shift towards protectionism in response to the pandemic is a threat to free trade. In 2020, we experienced the largest dip in trade since World War II and a restricted flow of essential goods, such as medical supplies and food.
Following a gradual post-pandemic reopening of economies, global trade made a spectacular recovery, only to be brought down again by Russia’s invasion of Ukraine. The IMF suggests that Russia’s war against Ukraine has decreased the volumes of goods and services traded by 3.4%.
This fresh crisis once again highlighted the brittleness of our supply chains. Not only was the Western world relying too much on Russia for energy, but also on food, such as wheat, and minerals, such as copper.
The importance of securing diversified, resilient supply chains has therefore never been starker. If Europe and the rest of the democratic world is to wean itself off dependence on nations like Russia and face down the next global crisis from a position of strength, we must ensure our commitment to the principles of free and fair trade remains unwavering.
Championing free and open trade, and challenging protectionism, is at the heart of securing global supply chains.
Breaking down trade barriers and unnecessary red tape allows businesses to export goods more freely and diversify their supply networks. This is instrumental in ensuring we can weather storms such as future pandemics more effectively. It will also mean we can sell more in each other’s countries, leading to new jobs, higher wages and more vibrant economies.
That’s why I am delighted to be Vice-Chairing the OECD’s pivotal Ministerial Meeting on Responsible Business Conduct (RBC) in Paris and advocate for the importance of building strong, resilient supply chains that like-minded, free trading democracies need to secure our future.
The UK remains strongly committed to free market principles and I look forward to working with our friends and allies in Paris to bang the drum for open trade.
However, this can only be achieved through a strong and respected rules-based system, of which responsible business conduct (RBC) forms part and parcel. This provides businesses with certainty and stability, building the framework which enables the removal of trade barriers and the promotion of free and fair trade.
Trust in this system is crucial. That’s why I will also be proudly signing the Ministerial Declaration to demonstrate the UK’s commitment to RBC. The Declaration will also underline our steadfast solidarity with Ukraine.
The UK remains a firm believer that trade liberalisation and increased market access, underpinned by RBC as part of a rules-based international trading system, is one of the best routes to more investment and more jobs.
I am excited to continue championing these principles with our partners and allies in the OECD and ensure that fellow democratic market economies are as prepared as they can possibly be for whatever challenges lie ahead.
Nigel Huddleston is Minister of State, at the Department for Business and Trade, in the United Kingdom. He studied politics and economics at Oxford University, and has a Masters in Business Administration from the Andersen School at UCLA. Minister Huddleston has been a Member of Parliament since 2015. More information about Minister Huddleston.
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