IMF Report: ‘Reduced cross-border trade flows…could result from the world fragmenting into multiple blocs’

Risks of further global trade fragmentation ‘becoming more salient’

International Monetary Fund Regional Economic Outlook, Asia and Pacific, May 2023 (Page 10) – “Risks of further global trade fragmentation are becoming more salient, considering ongoing US-China trade disputes (including new restrictions on trade in high-tech products) and heightened geopolitical tensions linked to Russia’s war in Ukraine. Asia remains especially vulnerable to reduced cross-border trade flows…and foreign direct investment…that could result from the world fragmenting into multiple blocs, with Asia’s exporters heavily exposed to the China, Europe, and the United States…”
Download Full IMF Report here.

Brazil’s Lula pushes for regional currency at South America summit

Also discusses revival of UNASUR in meeting with other leaders
Anadolu Agency (Turkey), May 31, 2023 – Lula discussed the importance of a common currency for the region and called for the revival of the regional bloc previously known as the Union of South American Nations (UNASUR) at the gathering, which was attended by 11 other leaders and representatives of South American countries.

EU needs Brazil for a new global strategy

Seeks alliance between the regions of planet favoring multilateralism organised around United Nations

Euractiv, May 15, 2023 – Europe dreams of an international system presided over by respect for the principles of the United Nations Charter and international law, but we know well enough that the UN does not have the authority to enforce any of this on its own.
For this reason, the success of such a paradigm inevitably depends on the alliance between the regions of the planet that favour multilateralism organised around the UN, liberal democracy and human rights, and an open economy framed within a world trade system that respects social rights and the environment. Latin America and Europe share these goals. This is why their alliance is strategic at a global scale.

Unleashing Economic Autonomy from Dollar Colonialism

Regional currency arrangements offer viable paths to lessen reliance on the US dollar
Silicon India, May 15, 2023 – Regional cooperation will strengthen, with increased focus on currency unions and bilateral trade agreements that utilize local currencies for settlement, fostering economic integration and reinforcing the independence of participating nations.Domestic industries will be prioritized, with investments in key sectors and the reduction of reliance on imports, leading to self-sufficiency and competitiveness in the global market.

NORTH AMERICA:

Mexico asks Texas to halt costly cargo inspections; will file USMCA complaint

Reuters, May 15, 2023 – Texas Governor Greg Abbott has ordered similar inspections before. In April 2022, cargo inspections prompted significant supply chain disruptions until Abbott reached a deal with the governors of four neighboring Mexican states to increase security efforts.

REGIONAL INFRASTRUCTURE:

GCC: Work in progress to complete railway linking Gulf countries

Saudi Gazette, May 15, 2023 – The Gulf Cooperation Council (GCC) Secretary General Jassem Al-Budaiwi stated that the GCC countries, the Secretariat General, and the GCC Rail Authority are continuing their efforts to finalize the completion stages of the railway linking the GCC countries, representing a prominent step in the joint Gulf interdependence and integration.

‘TOES’ OF TWO ‘FEET’? ( Daniel 2: 40-45 )

Globalization isn’t as dead as you think | Opinion

Regional hubs will create world led by two powers, surrounded by trade satellites

Penn Live, May 12, 2025 – The idea is that globalization could never have been a monolith – a self-sustaining whole but rather something that is interrelated with local and regional needs. Regional hubs will create a world led by two nearly equal powers, surrounded by trade satellites – one we expect to be a U.S.-led side that includes USMCA, Latin America, and Europe. The other, a Chinese-led side that will include Asia-Pacific, Central Asia, and parts of Africa.

The writer’s number of regional satellites is short of the roughly ten major regional blocs in that are in existence today. They are still in a state of flux, conflict, development, and consolidation of power, but the Bible scenario of ten fierce end-time kingdoms is coming into view.

EUROPEAN UNION:

Macron: Europe needs more factories and fewer dependencies

“‘Made in Europe’ should be our motto”

Financial Times (London, UK), May 11, 2023

‘MADE IN NORTH AMERICA’:

Opinion: Nearshoring is transforming the supply chain. Chicago can be at its center.

‘U.S. GOVERNMENT INCENTIVIZING MANUFACTURING IN NORTH AMERICA’
Crain’s Chicago Business, May 9, 2023 – On April 24, three major rail providers across North America — Canadian National, Union Pacific and Grupo Mexico Transportes — announced the creation of a new intermodal service connecting the three nations. The new route uses Chicago as its primary U.S. stop and main interchange point throughout the route. This service was primarily created to transport goods from the Mexican manufacturing cities of Monterrey and Silao to Canada and is indicative of the wider direction trade is headed. With the U.S. government incentivizing manufacturing in North America, the need for shipping goods across the continent’s vastness will only grow.

ARAB GULF – GCC:

New Schengen-style visa planned for GCC countries: Minister

Countries studying how to achieve unified single visa

Al Arabiya, May 4, 2023 – The Gulf Cooperation Council (GCC) countries are reviewing plans to launch a regional Schengen-style visa for tourists, a move that is expected to further boost economic growth, according to Bahrain’s Minister of Tourism.
Speaking during the Arabian Travel Market (ATM) held in the UAE’s Dubai, Fatima al-Sairafi said that the countries were studing how to achieve a unified single visa….
GCC member states include Saudi Arabia, the UAE, Kuwait, Bahrain, Oman, and Qatar….
GULF COUNTRIES ARE MOST ATTRACTIVE EMERGING MARKETS FOR INVESTORS
Consultancy-me.com, May 2, 2023 – A majority of investors worldwide plan to boost their foreign direct investment (FDI) over the next three years despite discouraging factors like inflation and war. The Gulf Cooperation Council (GCC) countries top the list for the most attractive emerging economies for investors….

‘MADE IN NORTH AMERICA’:
NEARSHORING — NORTH AMERICA’S NEXT FACTORY
Mexico a top choice for nearshoring to the U.S. market
Area Development, Q2 2023

De-dollarization as it is: Let’s call the hypothetical currency the ‘bric’

Much of multipolar world would still use dollars

BRICS TO BACK NEW CURRENCY WITH GOLD, OTHER METALS?
Modern Diplomacy, May 3, 2023 – ….A BRICS currency union — unlike any before it — would not be among countries united by shared territorial borders, its members would likely be able to produce a wider range of goods than any existing monetary union….
Since the BRICS reportedly plan to back their new currency with gold and other metals with intrinsic value, like rare-earth metals, interest-paying assets denominated in the bric would resemble interest-paying gold.

Brazil’s Lula supports trading currency for BRICS countries

‘Just like the Europeans created the euro’

WOULD ALSO SUPPORT SHARED TRADING UNIT FOR SOUTH AMERICAN NATIONS
Reuters, April 26, 2023 – Brazilian President Luiz Inacio Lula da Silva on Wednesday said he supported establishing a currency for trade between BRICS countries, a group that includes his nation as well as Russia, India, China and South Africa.
“I am in favor of creating, within the BRICS, a trading currency between our countries, just like the Europeans created the euro,” Lula said in a speech during a trip to Spain, without providing further details.
The leftist leader added that he would also support a potential shared trading unit for South American nations.

New BRICS development bank and economic multipolarity

BEAMS PROPOSAL BRINGS TOGETHER REGIONAL BLOCS OF BRICS COUNTRIES
The Island (Sri Lanka), April 26, 2023 – “The BRICS+ regional format presents an opportunity to …encompasses the majority of the Global South…One proposal in this regard has been the BEAMS platform, which brings together the primary regional integration blocks of the BRICS countries, namely BIMSTEC (India), Eurasian Economic Union (Russia), African Union (South Africa), MERCOSUR (Brazil), and SCO (China)…. this format enables BRICS to progress with trade liberalization across the Global South and establish inclusive cooperation platforms in both the financial and real sectors.” (Yaroslav Lissovolik, RIAC April 2023)

AFRICAN UNION TO JOIN EUROPEAN UNION AS G-20 MEMBER?
AFRICA’S SEAT AT THE TABLE: WHY THE G-20 NEEDS THE AFRICAN UNION
Foreign Affairs (Council on Foreign Relations), April 26, 2023 – ….Africa’s current combined GDP is $3.1 trillion, larger than India’s; if Africa were a country, it would be the world’s fifth-largest economy, and its share is projected to grow….
Much like the European Union’s inclusion in the G-20 as a single member, adding the African Union as a member would be an appealing way to significantly increase representation without adding too many seats to a group that was intended to be kept small enough to make decisions efficiently.

THE ‘NEW MERCANTILISM’:

‘Made in Europe’ debate blocks EU deal on ammunition deliveries for Ukraine

DIPLOMAT: FRANCE WANTS ‘STRATEGIC AUTONOMY’; ‘100% EU SUPPLY CHAIN’
Euronews, April 21, 2023 – According to the version described by several diplomats from different member states, France is asking for the supply chain of ammunition production to be entirely European, including the sourcing of key components needed to build the artillery shells.
FRENCH CAR LOBBY MAKES PLEA FOR BONUS FOR ‘MADE IN EUROPE’ ELECTRIC CARS
Reuters, April 19, 2023 – The proposal comes as Europe looks at ways to counter Chinese protectionism and U.S. subsidies offered by the U.S. Inflation Reduction Act.

‘MADE IN NORTH AMERICA’

Canadian Pacific, Kansas City Southern combine into CPKC

‘ENCOURAGES NORTH AMERICAN PRODUCTION’

CPKC SAYS RAILROAD CAN HELP SHIPPERS ESTABLISH BUSINESS IN MEXICO
SupplyChainDive, April 17, 2023 – Canadian Pacific officially combined with Kansas City Southern on Friday, creating the first transnational railway that connects the U.S., Mexico and Canada….
Access into Canada and Mexico positions CPKC to take advantage of increased cross-border trade from the United States-Mexico-Canada Agreement, which encourages North American production for automobiles, agricultural products and other goods. A section of CPKC’s site dedicated to nearshoring says the railroad can help shippers establish business in Mexico.

US works with allies abroad to develop semiconductor policies

BIDEN: SUPPLY CHAINS ‘RIGHT HERE IN NORTH AMERICA’

WFIN News, April 11, 2023 – “We are stronger and better when we work together,” President Biden said on a trip to Mexico City earlier this year. “We’re working to strengthen our cooperation on supply chains and critical minerals so we can continue to accelerate in our efforts to build the technologies of tomorrow right here in North America.”

THE ‘NEW MERCANTILISM’ –
PROTECTIONIST REGIONAL BLOCS:

World Bank Warns Against Trade Protectionism Amid Inflation – Malpass

Protectionism ‘that breaks down into regional blocs or protectionist blocs, that’s a concern’

UrdoPoint (Pakistan), April 10, 2023 – World Bank Group President David Malpass warned on Monday against protectionist trading blocs as the world contends with inflation.
“Trade is vital to productivity within the world … to the extent that that breaks down into regional blocks or protectionist blocs, that’s a concern and right now, that’s the direction of travel for the world,” Malpass said…

‘NORTH AMERICAN SECURITY’:

Joint exercise synchronizes cooperation between U.S., Mexican and Canadian water operations

GOAL OF CREATING COHESIVE REGIONAL MARITIME SECURITY AROUND NORTH AMERICA

Homeland Preparedness News, April 10, 2023 – Ships and teams gathered off the coast of Manzanillo, Mexico last month for a weeklong exercise under the North American Maritime Security Initiative (NAMSI), which brought together the U.S. Coast Guard, U.S. Navy, Mexican Navy (SEMAR) and Royal Canadian Navy (RCN)….
All of this in undertaken with the goal of creating cohesive regional maritime security around North America.

SOUTH AMERICA:

Former Bolivian President Evo Morales praises strengthening of UNASUR

Prensa Latina, April 10, 2023 – “With the return of Argentina and Brazil to UNASUR, our region strengthens its geopolitical gravitation before the US that has governments that think that God put them to rule the world. The 200 years of the ill-fated Monroe Doctrine should begin the extinction of Yankee interventionism,” the former president tweeted.
ARGENTINA AND BRAZIL REJOIN UNASUR
Peoples Dispatch, April 8, 2023 – The governments of Argentine President Alberto Fernández and Brazilian President Luiz Inácio Lula da Silva have officially rejoined the Union of South American Nations (UNASUR), a regional integration organization founded in May 2008.

EURASIAN UNION:

Eurasian Economic Union Discusses Launch of Digital Currencies in EAEU Financial Markets

An EAEU digital currency agreement would impact China and South East Asian trade
Silk Road Briefing, April 10, 2023 – The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

Towards de-dollarization: BRICS advances alternative to US-dominated financial system

Peoples Dispatch, April 7, 2023 – Following the inaugural China-Gulf Cooperation Council (GCC) Summit in 2022, China had announced that it would continue to import crude oil and Liquefied Natural Gas (LNG) from GCC countries and conduct trade settlements in oil and gas using the yuan….
The growing trend towards seeking alternatives to reduce dollar dependence, including trade in local currencies, is also being deliberated upon by regional organizations, including the Association of Southeast Asian Nations (ASEAN).
Earlier this year, Brazil and Argentina also proposed to work towards creating a common currency, called the “SUR”, to enhance regional trade and financial exchanges while reducing reliance on the US dollar.

Researchers back African Union to join G20 group of largest economic powers

‘WOULD BRING ALL 55 AFRICAN COUNTRIES INTO THE G20…AT THE COST OF JUST ONE ADDITIONAL SEAT’
Nature, April 6, 2023 – At various times France, Japan and the United States have all backed the African Union’s inclusion, says report co-author Doris Schroeder, director of the Centre for Professional Ethics at the University of Central Lancashire, in Preston, UK.
India, which currently holds the rotating presidency, is also on board….
“The inclusion of the African Union would bring all 55 African countries into the G20, thus giving representation to 54 countries more than the status quo, at the cost of just one additional seat,” the authors say.

ARAB GULF:
CHINA IS GETTING COMFORTABLE WITH THE GULF COOPERATION COUNCIL
Atlantic Council, April 5, 2023 – Beijing’s brokering of the recent Saudi Arabia-Iran agreement was borne out of necessity and opportunity. The countries in the Gulf Cooperation Council (GCC) are of critical importance to China’s energy security needs, while Beijing feels increasingly sure-footed in its regional diplomacy.

SE ASIA:
ASEAN MEMBERS SAY YES TO REGIONAL EV ECOSYSTEM
Jakarta Globe, April 5, 2023 – ASEAN member states have agreed to build a regional ecosystem for electric vehicles in a bid to strengthen the group’s energy security, according to Foreign Affairs Minister Retno Marsudi….
“Indonesia and the Philippines hold a strong position in the global nickel ore reserves. This gives a strong basis for a partnership and to become the leaders of the EV and battery industries, be it within ASEAN or globally,” [ASEAN Business Advisory Council (ASEAN-BAC) chair Arsjad Rasjid] said in a written statement.

Prepare for a multipolar currency world

Gillian Tett, Financial Times (London, UK), March 30, 2023 – ….Vladimir Putin pledged to adopt the renminbi for “payments between Russia and countries of Asia, Africa, and Latin America”, in a bid to displace the dollar….The net result, the [Centre for Economic Policy Research] predicts, is that a “multipolar” currency world could emerge in the coming years, of the sort that Jim O’Neill [the former Goldman Sachs economist who launched the “Brics” tag] is now calling for. That would not be as dramatic a switch as Putin or Xi might like to see, or that Washington alarmists fear.But, to my mind, it seems a sensible medium-term bet….
Gillian Tett is chair of the editorial board and editor-at-large, US of the Financial Times.
RUSSIA TALKS UP PROSPECTS OF BRICS COUNTRIES DEVELOPING NEW CURRENCY
CHINA, BRAZIL REACH DEAL TO TRADE IN THEIR OWN CURRENCIES
Cointelegraph, March 31, 2023 – A top Russian official has reportedly claimed that the countries of the BRICS alliance — Brazil, Russia, India, China and South Africa — are working on creating their own currency….
In a related development this week, China and Brazil reached a deal to trade in their own currencies. The move will remove the U.S. dollar as the intermediary, further empowering both nations to distance themselves from the world’s reserve currency.