The United Arab Emirates tops the Arab world in the Global Trade Resilience Index 2023.

The United Arab Emirates tops the Arab world in the Global Trade Resilience Index 2023.

Whiteshield, which has been at the vanguard of trade and sustainability for over 10 years, proudly launched its first Global Trade Resilience Index (GTRI 2023) on the margins of COP28 on December 7. The inaugural event brought together high-ranking government officials, important personalities from international and regional organizations, renowned academics, and leading private-sector voices.

Whiteshield has pioneered a unique technique to represent the current condition of trade ties, by product and by partner, in response to the expanding conversations surrounding global trade policy challenges and their role in helping the transition to greener economies.

Whiteshield has created a novel methodology for assessing countries’ ability to absorb short-term trade shocks and recover in the medium run. Their mission is to help countries achieve their sustainable development goals by finding areas for improvement across our 58 GTRI indicators, which represent 136 economies.

The top ten GTRI performers include nine high-income countries (Germany first, Netherlands second, USA third, France fourth, Japan fifth, UK sixth, Italy seventh, Singapore eighth, and Belgium tenth) and one upper-middle-income country (China ninth). Malaysia (20th) and Thailand (22nd) are two other upper-middle-income countries that fared highly.

Germany, the world’s third largest exporter, tops the GTRI rankings because to the robust trade networks it has woven around the globe over the years, as well as its very diverse commerce in terms of products and trading partners. Because of its strong linkages to Europe and the rest of the globe, efficient logistics and distribution networks, and business-friendly atmosphere, the Netherlands is the world’s sixth largest trade nation and ranks second in the GTRI.

The United States, the world’s second largest trading nation, ranks third in the GTRI. The high ranking of the United States reflects, among other things, the strength of its worldwide trade network, its role as a major global trading hub, and the many and sophisticated items it deals in. Despite being the world’s top exporting country and the world factory, China is only ranked ninth in the GTRI due to a strong capacity to absorb shocks (China plays a major role in global supply chains with diverse portfolios of goods and trading partners) but relative weaknesses in its institutional pillar.

Because of its role as a key global commercial hub, its business-friendly environment, extremely diverse trade partners, world-class infrastructure, and high quality logistics and customs capacity, the United Arab Emirates (UAE) ranks first among Arab countries and 31st internationally. Improving product diversification and advancing up the value chain to trade in complicated products are two areas for improvement.

The Kingdom of Saudi Arabia ranks third among Arab countries and 47th overall, owing to fast economic diversification initiatives and supportive policies. Institutional, financial, and regulatory reforms have resulted in significant improvements in the business environment as well as rapid growth rates in the travel, tourist, logistics, and fintech sectors. The Kingdom has managed to broaden its trading partners beyond its traditional markets; yet, while its goods trade diversification is improving, it has yet to fully realize its full potential. Border measures should be simplified, and law enforcement should be strengthened.

“In light of the growing discussions around global trade policy issues and their role in supporting the greening of our economies, Whiteshield has pioneered the Global Trade Resilience Index 2023, which presents a novel approach to support countries in identifying areas to improve both their absorptive and recovery capacities to trade shocks,” said Fadi Farra, Senior Managing Partner at Whiteshield. Our goal is to assist COP28 succeed, particularly in areas where trade and complementary policies can help drive both climate and sustainable development efforts.

“The GTRI is published at a time when severe disruptions to global markets have undermined trade resilience,” said Raed Safadi, Whiteshield’s Chief Economist. While attempts to “near shoring” or “friend shoring” can boost short-term resilience to geopolitical risks, they make countries less susceptible to other sorts of shocks, such as the current COVID-19 epidemic. Whiteshield created the GTRI to help countries improve their trade integration while reducing the impact of shocks on their economy. The study provides a tool for unlocking trade resilience by merging unique approaches founded in network theory, embedding trade shock simulations, and tracing their potential influence on trade flows.”