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Coleman Nee is senior economist at the Economic Research and Statistics Division of the World Trade Organization (WTO), where he has worked since 2004. Kamal Dev Bhattarai of ApEx spoke with him about global trade, problems faced by LDCs, and how geopolitics is affecting global trade.

How do you see the prospects of global trade in 2024?

We expect a gradual rebound in global trade volume for goods throughout 2024 and 2025, following a decline in 2023 primarily due to the persistent impact of elevated energy costs and inflation in developed economies, notably in Europe. Specifically, we project a 2.6 percent increase in merchandise trade for 2024 and a further 3.3 percent growth in 2025, following a 1.2 percent dip in 2023. Nevertheless, the presence of various downside risks has contributed to the uncertainty inherent in all economic predictions, particularly those concerning trade. These risks encompass regional conflicts, geopolitical tensions, and uncertainty in economic policies.

It seems we are making progress towards global trade recovery, what are the reasons behind it?

Inflation diminished real household earnings and reduced net earnings of businesses in 2023, leading to a decline in the demand for manufactured goods, which play a significant role in global trade. Conversely, as inflationary pressures diminish and policy interest rates eventually decrease, this should have a contrasting effect this year and the following, progressively boosting consumption and increasing the demand for imports.

What are the downside risks?

Geopolitical tensions and policy uncertainty could limit the scope of any trade rebound. While export growth should improve in many economies as external demand for goods picks up, food and energy prices could again be subject to price spikes linked to geopolitical events. Choosing an appropriate pace of interest rate cuts will also be challenging for central banks in advanced economies, and any miscalculation could lead to financial volatility later in 2024. The resilience of global trade is also being tested by disruptions on two of the world’s main shipping routes: the Panama Canal and the Suez Canal. 

The Panama Canal handles six percent of global trade, with over 70 percent of traffic destined for or originating from the United States. It is currently operating at partial capacity due to freshwater shortages, with restrictions likely to remain in place for some time. Meanwhile, the Suez Canal handles about 12 percent of global trade, and roughly one-third of container shipping between Asia and Europe. The diversion of traffic away from the Red Sea and around the Cape of Good Hope has added around 10 days to Asia-Europe journeys while boosting fuel costs.

Overall, risks are tilted to the downside, although there is some upside potential if trade in the European Union recovers faster than expected.

How does geopolitics affect global trade?

The global economy has been hit by several economic shocks in recent years while geopolitical tensions have been rising. In response to these and other concerns, some governments have become more skeptical about the benefits of trade and have taken steps aimed at re-shoring production and shifting trade towards friendly nations. These actions have had some impact on trade patterns, but evidence of a sustained trend toward deglobalization remains scant. One early sign of changing trade patterns is bilateral trade between the United States and China. Despite a record high in 2022, total bilateral trade between the world’s two largest economies grew 30 percent more slowly since 2018 than their trade with the rest of the world. 

In services, there are early indications also as data from the United States appear for example to show evidence of recent ‘friendshoring’ in information and communication technology (ICT) services. US imports of ICT services by region from 2018 to 2023. During this period, US imports from North American trading partners (mostly Canada) increased from 15.7 percent of total ICT imports to 23 percent. At the same time, US imports from Asian trading partners (mostly India) fell from 45.1 percent to 32.6 percent. 

Regarding the regional aspects, what are the prospects of growth in Asia?

In 2023, weak demand reduced export volumes in Europe and prevented a stronger recovery in Asia, while the picture in other regions was mixed. If the WTO’s trade forecast for 2024 is realized, Asia will contribute more to merchandise trade growth than it did over the last two years. The region is expected to add around 1.3 percent points to the projected 2.9 percent growth in world exports this year, or around 45. On the imports side it should add 1.9 percentage points to the anticipated 2.3 percent growth in world imports, or around 81 percent. Asia’s exports will grow 3.4 percent in 2024 and 3.4 percent in 2025. Asia’s imports meanwhile will grow 5.6 percent in 2024 and 4.7 percent in 2025. 

What are the key problems faced by LDCs countries in the global trade?

The impact of the 2023 trade slump on least developed countries (LDCs) is a matter of concern since these countries have limited resources to deal with global economic shocks. The drop in merchandise exports of LDCs last year was in line with the decline at the world level, but the contraction on the import side was larger, limiting consumption possibilities for LDCs. Merchandise exports of LDCs fell from $269bn in 2022 to $256bn in 2023, corresponding to an annual percentage change of -4.6 percent. This was roughly equal to the decline at the world level, leaving the share of LDCs in world exports stable at 1.1 percent. Meanwhile, merchandise imports of LDCs fell from $355bn in 2022 to $316bn in 2023. The -11 percent decline was roughly twice as large as the decline in world imports. As a result, the share of LDCs in world imports fell from 1.4 percent in 2022 to 1.3 percent in 2023.

LDC oil exporters recorded large merchandise trade surpluses in both 2022 ($24bn) and 2023 ($14bn). Other groups of LDCs experienced trade deficits last year, ranging from $36bn for countries that mostly export agricultural products to $4bn for ones that primarily export non-fuel minerals. According to preliminary WTO estimates for 2023, the US dollar value of LDC exports of fuels and mining products fell 16.5 percent in 2023. Their exports of agricultural products were also down 8.7 percent while shipments of manufactured goods dropped 12.6 percent. Exports of other products (including non-monetary gold) increased by four percent. These developments in value were influenced by corresponding price changes (for example, an eight percent rise in gold prices) as well as trade volume developments.

Nepali Congress has objected to the government’s decision to prorogue the winter session of the Federal Parliament.

A meeting of the Parliamentary Party held on Sunday morning concluded that the government has been ignoring the demand of the main opposition to form a parliamentary probe committee to investigate the alleged involvement of Deputy Prime Minister and Minister for Home Affairs Rabi Lamichhane in the cooperative fraud.

Congress Chief Whip Ramesh Lekhak mentioned that the government has been turning a blind to the demand of the party.

“There should be a serious and meaningful dialogue on the demand of the Nepali Congress to form a parliamentary probe committee to investigate charges against Deputy Prime Minister and Home Minister Ravi Lamichhane. But the government has been moving ahead against the parliamentary norms and values,” he said, adding, “The government should be serious on the people’s demand. The parliamentary practice cannot be undermined.”

He said that the Congress has not obstructed the Parliament, instead the House is being obstructed due to the irresponsibility of the government.

Congress has strongly condemned the government's decision to end the winter session.

Leader Lekhak said that the government has unexpectedly prorogued the winter session of the federal Parliament.

Let me start with a short disclaimer. I love short stories. I’m a sucker for stories that are a few pages long, especially when there’s a lot of work and I can’t seem to concentrate on longer works of fiction. Short stories also help me get out of the inevitable reading slump. Here, I must admit that I’m not very happy with how much I’ve read this year. Apart from a few rereads and some odd slim novels here and there, I haven’t enjoyed many of the books I’ve picked up.

A short story collection is always a safe bet. I don’t have to invest much time and mental energy into getting to know a character. And since a story takes an hour or two at the most to finish, I feel like I’ve at least accomplished my reading goal for the day. I’ve mostly gravitated toward horror stories like Bora Chung’s ‘Cursed Bunny’ and Carmen Marie Machado’s ‘Her Body and Other Parties’ which is why Cho Nam Joo’s ‘Miss Kim Knows and Other Stories’ was such a refreshing read.

Cho is the author of the best-selling novel ‘Kim Jiyoung, Born 1982’ which sparked a debate on feminism in South Korea while catapulting the writer to global fame when the book was longlisted for the United States National Book Award. Cho is known for highlighting gender inequality and misogyny in South Korea. Miss Kim Knows and Other Stories is a collection of eight stories about women from all walks of life. They are stories of life in South Korea from a female perspective. But the themes—loneliness, domestic violence, dysfunctional families, aging etc.—are universal.

What I liked about the book is that the stories aren’t dramatic but they leave you with some important messages—they might be things you already know and experience but you might have seldom paid attention to them. Women often make room for misogyny by not speaking up and letting things slide, and Cho draws our attention to that. She writes about the invisible labor women put in at home, work, and society at large, celebrating all the ‘little things’ they do to keep the ball rolling. In one of the stories, a neglected worker quits and the entire office starts to malfunction. In most of the stories, women are often repressed and maybe even unaware of what they want.

Some stories were a let-down. They felt a bit too cliché, like ‘Dear Hyunnam Oppa’ where a woman writes a letter to her boyfriend of 10 years, who has just proposed to her, listing out all the reasons why she doesn’t want to marry him. It felt too generic and forced. In ‘Puppy Love’, which explores love during Covid-19, the narrative ends abruptly, leaving you feeling unsettled. But that could have easily just been me and not a problem with the stories. Perhaps, I couldn’t relate to them. Maybe you will. With Cho, you never know, as her writing has the potential to tap into long-dormant emotions.

Short stories

Miss Kim Knows and Other Stories

Cho Nam-Joo

Translated by Jamie Chang

Published: 2023

Publisher: Scribner

Pages: 218, Paperback

There is no shortage of discussion in Kathmandu on the changing geopolitical landscape and the challenges Nepal currently faces in its external relations. Although serious research and publications are lacking, Kathmandu-based think tanks somehow manage to secure financial resources to organize programs at upscale hotels. Lately, there has been a boom in the number of foreign strategic and geopolitical experts visiting Kathmandu on the invitation of universities, think tanks and media houses, among others. These international and regional experts often visit Kathmandu to attend seminars and talk programs on geopolitics and foreign policy.

Although political leaders also participate in such programs as keynote speakers, only a few have the appetite and enthusiasm to listen to expert opinions. The main arguments of foreign policy watchers in Kathmandu can be summarized in the following points: there should be a national consensus among parties, at least on foreign policy issues; Nepal should strike a balance between India and China while maintaining cordial ties with the US; and Nepal should prioritize economic issues over strategic ones when dealing with major powers. While examining the election manifestos of major political parties, it seems all parties have the same position on foreign relations, as they all emphasize an independent foreign policy; balanced and cordial relationships with both neighbors; adherence to non-alignment and Panchsheel; and engagement with major powers on economic terms, among others. 

However, there are differences in the tone, tenor, and conduct of foreign policy between the Nepali Congress (NC) and major communist parties, particularly CPN-UML and CPN (Maoist Center), which have been in power for the past three decades. To illustrate these differences, let's consider some recent examples. Nepal voted in favor of a UN resolution condemning Russia's invasion of Ukraine in 2022, but communist parties opposed it, stating that it goes against Nepal's policy of non-alignment. While some former foreign ministers from left parties said it was okay, dominant communist leaders saw it as a tilt toward the West. Many communist leaders support Putin's justification of the attack, which is why Russia is engaging with communist leaders, not NC leaders. When it comes to China, communist parties, mainly CPN (Maoist Center), are a step ahead and more vocal than NC in upholding the one-China policy. Prime Minister Pushpa Kamal Dahal, during his China visit last year, made a commitment on the one-China principle (previously policy) and said Nepal stands against Taiwan independence. He often repeats the same statements in Kathmandu. We do not hear such statements from NC leaders. 

Earlier, in 2018, the then Nepal Communist Party-led government supported Hong Kong's new security laws. Another issue is the reported border encroachment by China in Humla district. NC formed both government-level and party-level panels to investigate this matter, but communist government and party leaders often reiterate that there is no border encroachment by China at all. 

The Belt and Road Initiative (BRI) is another case in point. Though the basic framework of BRI was signed by NC's foreign minister Prakash Sharan Mahat in 2017, the party is less interested in its implementation. Some leaders are openly opposing it. NC leaders may disagree, but it is clear the party is not as enthusiastic about BRI as communist parties. With India, communist parties are more vocal about some disputed issues such as the 1950 Peace and Friendship Treaty, the Eminent Persons' Group (EPG) report and border disputes. These issues have also been mentioned in the Common Minimum Program (CMP) of the present coalition government. However, the NC is not as vocal about those agendas. Instead, some NC leaders have started saying that there is no need to amend the 1950 treaty, and the party has not taken ownership of the EPG report. 

Regarding the US, fringe communist parties often criticize the US as an imperialist power. While mainstream communist parties do not directly subscribe to these views, there are differences between NC and communist parties on democracy and US policies. Communist parties are skeptical about America’s Indo-Pacific Strategy. They all were against the Millennium Challenge Corporation (MCC) program in Nepal initially. While NC openly supported, lobbied, and was even ready to break the alliance with Maoists to get the MCC endorsed by Parliament, left parties either opposed it or sat on the fence. Whether one agrees or disagrees, there is now more cordiality between China and Nepal's communist parties. China is engaging with NC at least at the government level. Over the past few years, it is a bitter reality that there is a lack of trust between NC and China, and between India and communist parties. The relationship between NC and China is not so cordial, mainly after 2015-2016, though Chinese leaders and scholars often remind NC about the role played by BP Koirala in laying the basic foundation between the two countries.

Additionally, political parties have highly politicized issues relating to major countries. This has been further exacerbated by coalition governments and political instability. It is futile to expect any substantial progress when parties with different views and political ideologies form a coalition government. There is a tendency among parties not to take ownership of agreements or understandings signed by governments led by other parties. $Due to the sudden changes of foreign ministers, if not the government itself, foreign powers are finding it very difficult to deal with Nepal. All this has eroded trust in the political parties and successive governments. There is no common vision or guiding document on how Nepal wants to engage with major powers in the changing geopolitical situation. 

No wonder, Nepal has not been successful in reaping the benefits from the economic rise of India and China. What is worrying is, there is no sign of improvement in the near future. There will not be political stability for at least next four years because parties have already agreed to lead the government by turns. Even after the 2027 elections, political stability remains elusive, as the possibility of a single party getting a majority is slim. If parties are responsible, they should deal with this issue seriously. Parties should refrain from taking sides or positions on big-power rivalry and should not politicize development issues; instead, they should focus only on economic engagement. However, there is slim hope with the current set of leaders whose only aim and ambition seems to be grabbing power by appeasing external power centers. The current polarization in the political landscape must be stopped without delay.