GFC23: Trade in the Fourth Industrial Revolution

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Yousef Gamal El-Din, Senior Anchor, Bloomberg TV: [Thank you very] much for joining us this afternoon for this important panel – Trade in the Fourth Industrial Revolution. There are lot of angles to this panel – everything from traceability to transparency. Technology has the power to transform global trade in a lot of ways. To help the scene for today's chat, I want to start off with Lynn Kuok directly. Please go ahead.

Lynn Kuok, Shangri-La Dialogue Senior Fellow, Asia-Pacific Security, International Institute for Strategic Studies (Asia): Well, first of all, thank you, everyone, for being here, for your interest. I was asked to speak about the global trends that are impacting the trade landscape. I don't work on trade or technology, but I do work on geopolitics. So perhaps I'll set up some of these geopolitical trends that have an impact on trade, as I see it.

In my view, the trade landscape has been shaped by various factors. First, the pandemic, which exposed the vulnerability of supply chains. Second, it has also been impacted by Russia's invasion of Ukraine, which underscored the risks of overdependence on any single actor. We saw that in terms of the overreliance on Russia for energy. But I think these developments merely heightened the trends which were already in motion as a result of US-China rivalry.

And great power competition, in my view, has translated into a movement away from trade, which has predominantly been on the basis of economic efficiencies to one where, as the Deputy Prime Minister of Singapore recently said, geopolitical alignment and security prevail. What this has meant in the context of the United States has been friendshoring, or onshoring, to reduce exposure to geopolitical rivals. And we have also, with the US and some other countries, had renewed recourse to industrial policy. While the US has always, to a certain extent employed industrial policy, Washington, in my view, has embraced it with a renewed fervour as a means by which the US can boost competitiveness and resilience in its competition against China.

Now, why all this is happening, in my view, I think even from a few years ago there was criticism of US foreign policy in the sense that it wasn't using all the tools at its disposal in competing with China. So it would rely on its immense military, build up its military presence in other regions, but perhaps was less savvy about using economic tools at its disposal. And so we had analysts like Robert Blackwell, as well as Jennifer Harris, who published a book, which I find very interesting – War by Other Means. And in that book, they exhorted the United States to reach for its purse more often and less for its guns. And so we see the United States deploying economic tools in its competition with China.

And I think that raises a couple of issues for today's panel. The panel today, according to the synopsis, is that it's meant to examine the economic benefits of the use of technology and trade, and how to ensure that these benefits are widespread as well as sustained over time. And of course, the speakers after me will discuss this. But I think what the climate of geopolitical competition gives rise to is two questions. First, what are the implications of economic efficiencies, taking a back seat to a geopolitical logic that we see today? And what role can technology play to minimize some of these costs? And second, what if these very technologies themselves are the subject of competition? So in recent years we've had Washington not only apply high tariffs to restrict Chinese imports and screen inflows of investment, but also restrict tech exports and review and insist on reviews of outflows of tech investment. And so this has implications, I think, for what we're discussing today.

Yousef Gamal El-Din: With the facts of this crisis, wanting to get a few other voices into this as well. Jagjit, if I can get to you and I'm going to rip up the script just a little bit because of the geopolitical events of the last 10 days, which weigh heavily for everybody watching us from around the world. But it creates certain vulnerabilities in different pockets of the globe. And I want to get to vulnerabilities in supply chains. From what you've seen in the data, building on some of the comments she made about the expression of US power and deploying sanctions and all that, what is your read on that today?

Jagjit Singh Srai, Director, Research; Head, Centre for International Manufacturing, Institute for Manufacturing, University of Cambridge: Well, one of the amazing things we've seen around trade, and supply chains that underpin trade, is there's been a long march of using technologies to try to get to different parts of the world, sourced from different parts of the world and really drive trade. And that's been a one way street, I think, for 20, 30 years. And the last three or four years we've seen a whole series of what we often called a polycrisis. We've seen disruption due to COVID. We've seen follow on disruptions due to supply chains becoming very unbalanced, inventory in the wrong place, containers in the wrong place. And I'm sure my colleagues will have something to mention around that.

But what I've seen is, my anticipated adoption of technology to help supply chains navigate these complexities went through a mini revolution in the last three years. So developments that would have taken five, eight, seven years – that we may have been talking about in 2030 – happened in the last three or four years, and some of them literally in the last few months. And just to give an example on that, if you look at the supply side of supply chains where suppliers and materials are sourced, we've seen new developments in control towers, watch towers that allow us to track location, speed of containers in real time. We've seen the ability to track back through not just tier one, but tier two, tier three supply chains in the leading practice organizations – something would never have been anticipated at this period. So that ability to respond to events and alerts is unprecedented. But I have to say this is for the leading practitioners. There's a lot of organizations that underpin those multinationals that don't have that sophistication.

So I think in terms of awareness of the problem and the ability to respond, we're in a very different place than we were two or three years ago. The Suez Canal, which is close to here, used to be a huge issue. I've seen supply chains reconfigure within 48 hours. That's something we would never have anticipated previously. So, yes, a lot of sad events at the moment and a lot of conflict zones around the world that supply chains are also having to respond to. But maybe before I pass on to my colleagues, I would say the ability for supply chains to flex in the event of a series of disruptions is something that has been well practised over the last two or three years, so we are in good shape.

Yousef Gamal El-Din: I mean, almost four-fifths of the 320 respondents recently surveyed by Bloomberg said that the recent shift towards protectionist policies like sanctions, export controls, subsidies, poses a risk to economic growth, as companies seek to make their supply lines shorter, they try and make them safer while governments try and freeze up rivals. I saw you were nodding your head, both of you will start with a response from me...

Sarah Thorn, Senior Director, Global Government Affairs, Walmart Inc: Yeah. So just a couple of points to pick up on both comments. One, sort of what happened during the pandemic and how we responded? One pretty staid answer that you're going to hear from most companies is that, yeah, we saw a lot of disruption and we figured out how to address the disruption. And so to make supply chains more resilient, we've had to think about security of supply is what we call it. Do we have too much dependency on one supplier or one country? What are the products that are most important to our shoppers and how do we make sure they're on the shelves? And so that's where you see a lot more diversification of supply. I'm not sure that's a bad thing. I actually think it leads to more opportunity in different countries. If we're doing it right, you know, if we're doing it in inclusive way.

The second thing I want to say is I really hate the narrative that supply chains broke, that they were brittle and fragile. Because what we saw during the pandemic is we had a failure to prepare, quite frankly, for the pandemic. We had a pandemic playbook, but we didn't have any masks in stock. And I'll give you an example, though, how the supply chain responded. You know, we are a big sourcer, but we weren't a big sourcer of things like isolate gowns or masks prior to the pandemic. But we were asked by the government to source these things because we didn't have them, because we didn't have them in the stockpile. And so we had to go out to our supply base and try to figure out who's got isolate gowns, how do we get these gowns in? What we found were suppliers that were incredibly responsive and said, 'You know what? Why are we going to isolate gowns? Why can't we use gowns that we can coat with an antimicrobial spray, and reuse them and rewash them instead of throwing them away. We found that suppliers in Central America and we got them to New York City quickly and efficiently, and fast.

And so, when I hear this narrative that the supply chains broke, I don't believe it because it's not what we see. We see, yes, they bent, yes, there were dislocations, but a lot of that was consumers acting in completely irrational ways and governments giving consumers signals like, 'Oh, go shop for three weeks at once.' It's really hard to plan for that. It's really hard to respond to that. But once we started to really think about how we work collectively at this, how we think about how supply chains can be more reactive and more adaptive, we did pretty well. And the thing that actually did sort of hurt us is where you ended, which is governments putting restrictions on exports of food and medical products, which is somewhat criminal if you think about it, if you have a reliance and trust in international trade system and you don't know who to go to. This happened to us, I had an order and a shipment of of medical supplies, but the next day a government said we can't we can't export them, we need them ourselves. So who do you go talk to? Who do you get the licence? Is there, should there be more practical regimes so that we can reinforce the trust in the system?

Yousef Gamal El-Din: Mona, with a bit of a global view as well from the World Bank.

Mona Haddad, Global Director, Trade, Investment and Competitiveness, The World Bank: Yes. Thank you very much. So let me start by stating that trade has been very important for developing countries. Export-led growth strategies really allowed developing countries, many of them beyond China, to grow very fast, much faster than otherwise, to create jobs and to reduce poverty. So for us, trade is the main driver for for growth and development. And we would that we would always support an open trade regime that will maintain access to markets for for these countries. And today, clearly trade is disrupted for many reasons. One is the geopolitics, which are creating some rhetoric about reshoring and so on. At the same time, some reshoring is happening because private sector wants to reshore because of the need to diversify, or the sources of their products, they want to be closer to the final consumption. Or because of the new technologies, they don't really need to outsource very far from home. And various reasons like that, which is, you know, certainly something that can continue to happen. But when it is driven by by government policies that restrict artificially the flow of goods and investments, I think that becomes a problem because it is depriving developing countries from the investment that was coming, and the trade opportunities that they were benefiting from.

So another disruption is, of course, technology. Technology has opened a lot of opportunities for developing countries trade, including for digital services, exports and digital services. Exports globally are now 12% of total exports. They have been growing since 2005 at the rate of above 8% per year on average. And developing countries are benefiting from that. From a very low base, but still their exports of digital services have been rising very, very fast. And this is clearly an opportunity for them, and they are they are trying to take advantage of it.

And the last disruption is coming from another another challenge we are all facing, which is how do we deal with climate? And we are seeing a lot of developed countries imposing cross-border measures on trade that is not taking into account the impact it's having on developing countries. And there is a risk of seeing a lot of small and medium enterprises in developing countries basically drop out of the supply chains that they were part of and therefore being affected by this.

Yousef Gamal El-Din: We'll get back to sustainability, because it deserves sort of a separate discussion. I just want to zero in on the definition of trade tech, because before we came on stage, you were saying, 'Not sure everybody is on the same page around trade tech.' What does it mean to you?

Jagjit Singh Srai: Well, there are multiple technologies that underpin effective supply chains. So we've seen a lot of digital technologies that support that. We've seen control towers that monitor the flow of goods. It could be on the supply side in terms of procurement and supply side replenishment. It could be also on the demand side trying to understand consumer behaviour. Can we use those technologies to also predict demand as we move into a more predictive analytics world?

So this technology is about understanding supply and demand, but there's also the fundamental technologies that allow manufacturing to take place. For me, there is no such thing as trade tech per se. There's a whole myriad of technologies that support the effective manufacture and distribution of goods and services, and often services are wrapped around goods as we go forward. If you see some of the latest developments in supply chains, many manufacturers would stop worrying about their products when it left the factory four walls, Then they started to worrying about where it was in their warehouses and distribution centres. And very often now we see them connected to the end user in the consumer, so that the first mile, second mile and the last mile have all become part of the broader supply chain.

I think going back into the trade conversation, one of the broader concerns is the raft of regulations that are coming forward. Now, many of them are well-intentioned. I'm actually pleased to see some of the traditional principles on which trade was initially set up on around making sure access to resources, access to products and services was equitable and that's possible. But we strongly, in my view, move to a very cost centric and we were talking about that in the introduction about it's become an efficiency game. So can we start to actually think about better trade, where we're bringing dimensions. However, if that becomes a fragmented execution, I think it has two negatives – one is obviously an efficiency and productivity drop for the big players, but it could end up excluding small and medium-sized enterprises. It could end up excluding those that are countries perhaps without the infrastructure to respond to regulatory change quickly, or where regulation is not suited to their particular needs.

Yousef Gamal El-Din: Let's flesh that out a little bit. I mean, you work for one of the largest employers probably in the world. How many people work from Walmart?

Sarah Thorn: Over 2 million.

Yousef Gamal El-Din: Okay. So with that kind of customer base, you've got very complex supply chains. What are you seeing in terms of the regulatory network, as it were, and sort of what he was talking about a moment ago?

Sarah Thorn: Yeah. So I think the goals are right. We want more inclusive and sustainable trade. Everybody does. And I think we have the tools to do it. Technology helps; marketplace e-commerce marketplace has really shortened and made much smaller the gap between the informal and the formal. Smaller suppliers can actually become, you know, mini multinationals by accessing marketplaces. That's great. Sustainability standards and thinking about climatem and scope three, and really measuring what our impact is on the environment, we absolutely support that. What I worry about with some of the corporate due diligence legislation and requirements is that they're so prescriptive, they're essentially asking the end of the chain, the retailer, to trace all the way down to the beginning of the chain, such that we need to trace everything that comes out of the ocean in the ground. And not only from a sustainability perspective to know what the carbon emissions are, but also to make sure that the workers in the supply chain are treated fairly and decently.

So what that means in practice is, if I go into a tuna factory in Thailand and I say, 'How are you tracing your raw materials? How are you making sure that the tomato paste that you're using to make this spicy tuna mix is coming from a place that is not subject to forced labour?' They need to go back and trace that and they need to show the documentation. At the same time, they need to make sure that the workers in the factory, that may be migrant workers, are being recruited fairly and that they're paying all the fees and they have the documentation. And we need to know the carbon footprint of your emissions. We don't have a good technological system right now that is open source, that is verifiable, to be able to track all that data and then show it to the border authorities who want to know: where did this product come from? Can we make sure it's coming from a place that the workers are treated fairly? And then to actually then sort of report on it for any scope through your reporting and then actually, after we sell that tuna can, we need to sort of report on what happened to the tuna can for further scope three reporting. So we've created this for the right reasons, the importance of making sure we have sustainable, inclusive supply chains. We don't have a good technological solution because a lot of that data is paper and it's very hard to verify. But then we actually do have some verification systems, that are like isotope testing and DNA testing, that are going to verify without the ability for us to actually use a blockchain or distributed ledger or some other technology to make sure that what they say is what they say.

Yousef Gamal El-Din: They I mean, there are a lot of smart people in the room, so let's see if we can come up with some ideas. Maybe the World Bank has some ideas specifically. I mean, you lead in terms of investment and competitiveness. What kind of innovations could could help kind of break the mould there?

Mona Haddad: So we're we're actually working now with SMEs and countries that are affected by such policies and try to help them first to decarbonize their production, and second, to help them show that they have complied, especially when they're very dependent on exports to specific markets that actually have these either carbon crossborder measures, or that have these new due diligence acts or deforestation acts and so on. So this is becoming pretty overwhelming for SMEs, for small and medium enterprises, in developing countries. And there are different financing means that we can provide and we're trying to be innovative, but we are still in the exploration mode, trying different tools, before we get there. Andalso again putting in place a compliance framework and a certification framework around that, so that they don't spend time unnecessarily being lost about how to go about that. And this is really costly. Who's going to pay for it, is something that one has to think about, and perhaps some cooperation between developed countries and developing countries on these on these issues would be helpful.

Yousef Gamal El-Din: Lynn, I can see you taking notes and you've got an iPad at the same time so you're, you know, a couple of steps ahead. But I want to find out what you're running by writing down. Do you have any any strong views to to a certain angle.

Lynn Kuok: I think it because I work in the security community, foreign affairs and security, what really strikes me is sort of the two different conversations that one has around trade in the security community on the one hand, and then in the business community on the other hand. And the business community is about let's talk about trade efficiency, let's talk about how trade can be made better, to be made more inclusive, etc.. And the the security community is worried about, obviously, national security concerns – sometimes at the cost of the economic efficiencies. So they're perfectly willing. For instance, the United States, if we look at the recent speech by the national security adviser at Brookings Institution, this was in April this year, he was a national security adviser and he was talking about economic policy. And I think either explicitly or implicitly, he made two points. One is that trade has failed the middle classes of the United States, and we need industrial policy to correct some of this. And second, you know, given the geopolitical climate, you know, we have to accept that some there's going to be some trade-offs in terms of economic efficiency for national security goals.

Yousef Gamal El-Din: You were saying that trade failed the middle class?

Lynn Kuok: This is not my view. But I think even if we look at the before President Biden became the president, so as a candidate, he was writing pieces together with his team about how we need to make trade better for the middle classes. And so foreign policy now, in the United States, is driven by a desire to make it better for the middle classes of America. And what this has meant in practice has been a renewed focus on industrial policy, which some economists might feel distortionary.

Yousef Gamal El-Din: And I guess the rabbit hole here, who thinks that trade has let down the middle class in the US or otherwise? If you could raise your hand if you agree that it has failed. Does anybody think it's failed? We've got a couple of here. Okay. The rest of the thinks that it's worked. Okay. You're one of the people who thinks it's failed.

Jagjit Singh Srai: If it was just to make sure ... To be serious, there's is sort of an assumption, I think maybe in the conversation, that the trade we've got today is is good and it's as good as it gets. I think it can get a lot better. And so I think the danger of driving purely an efficiency-cost conversation has probably led us into supply chains that, yes, they've been able to flex but weren't as resilient as they probably should have been.

So I would say there is a better trade to be going for, and technology has its role to play. I think regulation has its role to play, but it needs to be done in a in a more smarter way than it's probably coming out. At the moment, we're seeing – just looking at some of the regulations that European manufacturing firms will have to look at – I think there were 17 new regulations that I could look at. And then they're not even European, there are some from France, some from Germany and so on and so forth. So how does a supplier – it doesn't have to be a multinational who's serving multiple clients across the globe – handle all that complexity?

Now, technology can help. And we've just looked at, we're just completing a project at the moment, and the dynamics of that is really interesting. First off, it's a pretty competitive collaboration. It's not a one firm solution. It's competing firms coming together to develop necessary infrastructure. So in pharmaceuticals, for example, certificates of analysis ensure the quality of the product. It is what it is, and it's up to the spec on a single item. You might have 35 different formats that a manufacturer has to deal with coming, and some will have signatures and some would have typed notes and so on and so forth. So we've been developing some infrastructure across multiple multinationals to make that a smooth, a smoother way of introducing into the manufacturing system. So I think technology can play a role and I think it can handle some of the complexity that's being created. But is all of that complexity necessary? So that would be my sort of take ...

Sarah Thorn: Can I answer your question ...?

Yousef Gamal El-Din: Yeah, go ahead.

Mona Haddad: No, I mean, on this question about trade having hurt the middle class in the US, I just want to say a couple of things. Trade has made things so much cheaper for the consumer in the US, especially the middle class. So I think we need to look into this. The second point is that, you know, countries evolve in their comparative advantage. So you don't want the US to be producing t-shirts anymore that are really moving up the value chain, producing more sophisticated products, innovating. And this is where their resources should go, including by strengthening education, for example, by improving health and not really being stuck in the present because they're not competitive in what others are doing right now, that they should move on. Third, for the countries themselves that are exporting developing countries, I think that because trade has made many things cheaper, including capital goods like machines, it opened a lot of opportunities for developing countries to upgrade and mechanize much faster than they would have ever been able to do had they only relied on US technology. Because it was ... it is more expensive and therefore it allowed a lot of developing countries to move up the value chain, leveraging this cheap machinery and technology much faster. So I think we need to really understand all this.

Yousef Gamal El-Din: To give that another look... sure.

Sarah Thorn: Yeah. Just unpacking that statement: has trade failed the middle class? I think trade did exactly what it was meant to do. If we look at comparative and competitive advantage, we were able to leverage the rules based international trading system for the last seven years, for policy certainty for growth, for lifting. I mean, what workers are we talking about? Think of how many people are lifted out of poverty because of trade. Trade worked. What didn't work were the policy reactions to trade. We underinvested in infrastructure. We underinvested in education. We underinvested in the reaction to trade, so that you have a frustration in the middle class. They don't feel like they have the opportunities that they had before, if you are a low-skilled wage worker because you're competing with the world on wage. So we should be able to hold two ideas in our heads that we can trade, and we should have the right policy reactions to invest in our workers and our people, so we can become more competitive.

I worry about this narrative because it sort of says, 'Everything we did wrong, we did it for too long.' If I heard 'for too long' one more time by the people who actually negotiated these trade agreements, I would be, you know, it's so frustrating because what we should be saying is exactly what you said. Should we make it better? Yeah. Do we know how to do that? It's not hard. Invest in your people. Invest in your infrastructure. Have good rule of law. This is the same thing for emerging economies. There are economies that we really don't trade with. We really don't trade with. Why? The boats don't come on time. The people don't show up. There's no trust in government. There's no rule of law. There's no inputs to create vertical supply chains. You don't you have barriers on inputs, right? You're going to have high tariffs for importing. It's not hard. We have success stories from trade; look at the Asian tigers. I mean, there's empirical evidence that we can cite.

Lynn Kuok: And so with these success stories, why has it been so difficult to make a case, in the United States, that trade works? Perhaps the policy reactions to trade do not work. And so, because this alternative argument hasn't found traction, the United States has pulled out from trade agreements and it's hurt the US economically, it's hurt it in terms of its international standing. So what do you think are the chances that the United States – I'm sorry, I'm asking a question – but what do you think the chances are that we can see the United States in the future move forward with a positive narrative on trade, recognizing that there were perhaps inadequate policy responses to some of the negative downsides and then, you know, charging ahead and forging ahead in terms of trade [and] renewed, energized trade policy.

Sarah Thorn: I don't think it's going to happen any time soon. We have an election coming up and and we don't do good policy-making usually right before elections. I think we're just seeing pendulum swings. And I think when you see... what we've seen in the past, what has worked is competition, when we talk about trade in terms of competition. So if you think about why the US started to negotiate free trade agreements again and why we reinvest in the WTO five, 10, 20 years ago, it was because the Europeans were creating ... Why do we have NAFTA? It's because of European Union. So when we feel like we're falling behind and we will, if we're not engaged in the global economy, if we're not taking advantage of a rules-based stable trading system. Because it's like democracy, I'm really not sure what the other systems are that are better, then I think what we'll see is the reaction that come back and people come back slowly. But we won't call it trade. We'll call it what we call it now, because supply chains. So supply chains are the new trade.

Mona Haddad: So to add to this, I think, there are two forces. One is what what we know the comparative advantage of in trade, how it benefited everybody, but also how to make it better, as we just discussed – many ways of doing it better, because also there is new technology, there are climate issues, there are labour issues and so on. But then there is another side to it, which maybe it wasn't there before, which is the politics and I think... which is your area. The geopolitics are now so intertwined with trade policy that it's not all economic rationale that is driving decisions.

And also because of because of COVID and the aftermath and all these shocks that we are experiencing, I think there is a realization that there is a vulnerability in being too dependent on few countries for key commodities that are important for the future, and therefore there is a need to backtrack and rethink certain things. So that's all fine, as long as we don't throw the baby with the bathwater. So let us maybe carve out these sensitive issues, deal with them separately, but then safeguard, most of the multilateral trading system and the trade regime.

Lynn Kuok: Yes, and I think this is where businesses can really contribute. Because, first of all, businesses can recognize, of course, that there is a geopolitical competition going on and accept that there will be some inefficiencies in the system, but then kind of work with the government to say, okay, we recognize that you need this for national security, but perhaps we can minimise the economic costs by doing A, B, C. So don't just regulate without consulting us, please speak to us. You're smiling...

Sarah Thorn: We have conversations like this...

Lynn Kuok: Yes. And so but I think that there needs to be a lot of that going on. Otherwise, the regulations are going to be too wide and perhaps counterproductive. And I think the second thing that should be done, as well, is that businesses and governments who are concerned about the way that trade is going should be raising instances where the trade policy that say the United States has implemented, has actually been counterproductive and have worked against US interests.

So, for instance, when you see the so-called decoupling or de-risking from China that has allowed some of the manufacturing to move to third countries, but then they are using Chinese goods and repackaging it a little bit, sending off to the United States. And as a result, I think China wins because because here you have these countries then approaching China, forging stronger ties with China, and consequently even the national security objectives that were the target or the goals of US economic policy have not been achieved. So I think that's really unfortunate.

Yousef Gamal El-Din: And we saw that in a shocker announcement just in the last 24 hours from the US government that they were going to ask Nvidia to no longer push out some of its chips into the market in China. That's going to have a ripple effect, not just on Nvidia stock, but just broadly on supply chains. And suddenly overnight, such an important link can be disrupted. You had a view on this as well..

Jagjit Singh Srai: Yeah. So I think trade policy and industrial strategy always went hand in hand. And I think if you have an absence of an industrial strategy, you have a non-functioning trade policy and then you have these trade tensions. The other side of the trade coin is, is the supply chain. So depending on your trade policy and industrial strategy, you have the supply chains that are coherent with that. So I think the sort of example of a trade policy that results in blocking certain sourcing locations, results in the supply chains reconfiguring to flex around that constraint.

I think there's a really sweet space around trying to develop industrial strategy that nurture the supply chains, that give you the resilience in key product categories that actually encourage development in key markets around the world. It's beenvery polarized the Southeast Asia development. What about Africa, for example? What about the Middle East, that we're in? Great locations to actually start to develop, providing they do those basics that were mentioned and they're not difficult to understand basics, but if they're not there, you can't easily source from those locations. So I would just say trade and trade policy, the flip side of that coin is supply chains. They are extremely intertwined.

And I think there is room for industrial strategy. I think having a completely hands-off approach, which is maybe where the recent environment has taken us, I'm not sure it is the right approach. I think they ought to be an industrial strategy, whatever location you're in, to encourage those supply chains which can benefit from that particular context, those particular skills, that particular infrastructure, to indeed leverage those assets.

Sarah Thorn: I don't disagree. I mean, I think we need smart trade policy. And so I don't disagree. I think the challenge I have is that I'm not entirely sure that government is best placed to choose winners and losers on trade. I think sometimes we react to the last crisis as opposed to having a lot of foresight and thinking about what's the next thing. And by the time we get the policies in place, I fear we're going to have a glut of semiconductors, really soon, because we're so focussed on critical minerals and semiconductors, and what aren't we thinking about? So how do we have a flexible regulatory approach and flexible incentive approach that we're actually being smart about the future as well?

Mona Haddad: And I just want to put a plug for developing countries. So as all of this is cooking at the level of developed countries and, you know, the powerful countries of the world, we don't want to leave behind the developing countries and all the regulations that are being put in place, we really need to look at the impact on developing countries. And we want to keep opening the door for for them to take advantage of the new technologies of of trade and so on. And here I have some data. For example, I was talking about how digital services trade has been booming, including for developing countries as a group. But, in terms of digital, although 84% of the people in Sub-Saharan Africa have access to 3G service and 54% to 4G mobile internet service, only 22% use mobile Internet for productive purposes, so they're not really leveraging that.

There's still a lot to to do on the digitalization in developing countries, whether it's the infrastructure itself or the regulatory framework to enable to use the data flows, the signatures, e-contract, the e-finance and so on, and the digital skills that are needed for people in Africa and elsewhere to take advantage of this big opportunity. So let's not forget those. Otherwise, the digital divide and the divide in general is going to widen.

Yousef Gamal El-Din: We're going to have to we have to leave it there, I'm told we're out of time. We covered a lot of ground with energetic discussion. So avery big thank you to our esteemed panelists and thank you for being such an amazing audience.