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Welcome, Nikolaus.

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Thank you for having me.
Here at Davos,

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everybody's arrived at a time
where we're seeing wars, we're

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seeing disruptions and supply
chains changing the way global

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trade is happening.

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You've recently done a report on
this.

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Just give us a sense from your
findings.

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How do you think the dynamics of
global trade are changing right

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now?

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Well, actually the good news is
it's not as gloomy as you might

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think when you listen here
around, because the first thing

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to see is that actually global
trade will continue to grow.

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Despite us talking about
deglobalization or the end of

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global trade, we see actually
global trade growing by 2.8% in

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the next 10 years, per annum.

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This is, however, less than GDP,
which is growing at 3.1%.

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And this is also much less than
what we saw at the beginning of

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the year 2000, where we were
growing by 6 and 7%.

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So both parties are right.

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Trade is growing, but not at the
pace we had in the past.

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That's so interesting.

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How is that happening?

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Are there some countries that
will be making use of

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globalization more and others
who are sort of retracting?

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Yeah.

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Well, I think the interesting
thing is that we see shifts in

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global trade.

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And without being too
complicated, I think you have a

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#1 winner in this whole
development, and that's

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Southeast Asia.

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Southeast Asia will have 1.2
trillion additional trade in 10

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years from now.

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So this is a country,

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this is a region that is
actually very profiting of that

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development.

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But you also have a positive
development, for example, in the

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North Atlantic.

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Trade between the U.S. and
Europe will grow.

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We have a massive development of
trade in North America.

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Some people call it the
stronghold North America where

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Canada, Mexico, and the U.S.
will see an immense development

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of trade.

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So that's on the positive side.

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On the negative side, I think
you have of course traditional

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trading lines that are going
down. China, U.S. obviously, but

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also Russia, Europe, for obvious
reasons.

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Last but not least, also UK that
sees the strong impact of Brexit

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on its trading routes. That's
amazing.

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So geopolitics is really playing
out in the way people are

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trading.

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How do you see this playing out
over the next decade in terms of

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these shifts?

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Well, I think over the next
decade we have five big shifts.

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I mentioned a few of them.

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First, North America will get
more regional.

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Mexico is the big winner
vis-à-vis United States and

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Canada is also going there.

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So that's number one, which will
be important. I think second,

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U.S.-China trade tension will
not be easy.

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Third element is what I
mentioned before: ASEAN, the

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superstar, the super winner,
Southeast Asia, 1.2 trillion.

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Number four, India is getting
really on the global stage with

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Free Trade Agreements with a
very capable population that

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will drive it.

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And fifth, not to forget, a
redirection of Russian trade.

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Given Russia doesn't trade with
the West anymore, we see booming

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trade with China and with India.

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So the trade is happening.

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It's just happening elsewhere.

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For countries who want to be
part of the globalization

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success story, looking at ASEAN,
what is it that's working for

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them so well at the moment?

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Is it that they're not in, you
know, they're not getting

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involved with sanctions?

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Is it the, you know, is it
geopolitics?

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Why?

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Why is this such a success
story?

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Well, I think ASEAN and the
countries that are in Southeast

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Asia have a great combination.

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So there are external factors
like companies looking for a

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China plus one or two strategy,
so moving business from China,

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to Vietnam, to the Philippines,
to other players.

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But the countries themselves are
very attractive when you look at

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the quality of infrastructure,
the quality of talent, still

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relatively low labor cost, a
stable political environment,

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and huge logistical abilities
like the port in Singapore, but

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also the development of ports in
Vietnam.

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So I think that's this
combination what favors that

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specific region specifically.

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So they'll be benefiting the
most.

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For companies who are trying to
navigate this at the moment,

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it's difficult.

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I mean, there's so much
instability, it's really hard to

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know how to work around it.

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What are your tips?

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What are the things they could
be doing that they won't regret?

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Yeah, well, you just said it.

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I think there are few no-regret
moves that every company can do

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that is acting on a global
stage.

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I think first it's really around
developing a geopolitical

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muscle. In understanding what
geopolitics mean.

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You know you have specialists
for legal, you have specialists

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for M&A, you have
specialists for finance, but

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very few companies really
understand what free trade

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agreements mean, or what tax and
tariffs will have on their

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growth.

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So that's one thing,
geopolitical muscle.

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Second thing: be prepared to the
fact that we'll have an

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environment of inflation and
price volatility in the years to

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come.

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Cheap money will not come back
very soon.

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So we need to take that into
account.

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We also need to think about
setting up our organization in a

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way that we are adapted to
different regions.

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Yeah, we are in a fragmented
world, so we cannot have a

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uniform organization.

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We need to think about the risk
and cyber control going forward.

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So I think these are just a few
no-regret moves.

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And last but not least, the most
important one is actually to

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think about supply chain
resilience, which means don't

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put all your eggs in one basket
but try to find different

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sources for your product. Look
for different markets so that

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you're not becoming dependent on
a ship that just happens to

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strand in the Suez Canal.

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Thank you so much for talking us
through that report.

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That's Nikolaus Lang here at
Davos.