THE United Nations (UN) declared efforts to 'friend-shore' manufacturing could weigh on a global trading system, reports Bloomberg News.
A new report warns of transport headwinds and inflationary pressures tied to Russia's war and the Covid crisis.
'The trade system is a very complex system,' said United Nations Conference on Trade and Development (UNCTAF) secretary-general Rebeca Grynspan.
'If you try to get away from one part of the world, you create a huge disruption to the system. Everything changes.'
While UNCTAF stated it sees 'no evidence of a mass exodus' away from offshoring trends, US and EU friend-shoring plans have the potential to further fragment international commerce.
Disruptions from the war in Ukraine have led to higher grain prices and dry-bulk freight rates, contributing to a 1.2 per cent increase in consumer food prices.
Labour strikes pose risks to the logistics industries tied to ocean shipping.
'Faced with rising inflation and increased cost of living and the introduction of automation, there is the potential for widespread unrest,' said the report.
Over the last year, policymakers in the US and EU capitals have sought to reduce their dependence on nations like China and Russia for critical goods like food, energy, and semiconductors.
The trend was stimulated by Covid crisis-related supply snarls, which encouraged companies to shift production closer to their consumer markets.
However, if supply lines operate along open regionalization patterns, some feel it could improve value chains and more sustainable growth in the developing world.
SeaNews Turkey
A new report warns of transport headwinds and inflationary pressures tied to Russia's war and the Covid crisis.
'The trade system is a very complex system,' said United Nations Conference on Trade and Development (UNCTAF) secretary-general Rebeca Grynspan.
'If you try to get away from one part of the world, you create a huge disruption to the system. Everything changes.'
While UNCTAF stated it sees 'no evidence of a mass exodus' away from offshoring trends, US and EU friend-shoring plans have the potential to further fragment international commerce.
Disruptions from the war in Ukraine have led to higher grain prices and dry-bulk freight rates, contributing to a 1.2 per cent increase in consumer food prices.
Labour strikes pose risks to the logistics industries tied to ocean shipping.
'Faced with rising inflation and increased cost of living and the introduction of automation, there is the potential for widespread unrest,' said the report.
Over the last year, policymakers in the US and EU capitals have sought to reduce their dependence on nations like China and Russia for critical goods like food, energy, and semiconductors.
The trend was stimulated by Covid crisis-related supply snarls, which encouraged companies to shift production closer to their consumer markets.
However, if supply lines operate along open regionalization patterns, some feel it could improve value chains and more sustainable growth in the developing world.
SeaNews Turkey
