NEW ERA OF TRADE

Amidst geopolitical turmoil and fiscal trials, an innovative framework for global commerce is taking shape. As the world transitions from a period dominated by Western influence to one of multipolarity, the norms that will govern this new landscape are yet to be established.

Calls for the overhaul of archaic alliances are growing louder. "The existing trade system fails to serve the collective, with escalating trade impediments, protectionism, and treaty violations presenting formidable obstacles to the worldwide economy," said Kazakh President Kassym-Jomart Tokayev during the Bao Asian Forum's plenary session. He advocated for a revamped system grounded in "equity and transparency."

Concurring with this sentiment, experts highlight the detrimental impact of protectionism and commercial conflicts on the global economy. "A trading system that is both more accessible and equitable is imperative," remarked IMF Chief Economist Gita Gopinath.

The Four Pillars of Transformation

The future configuration of this system is a subject of debate. Some propose bolstering extant entities like the World Trade Organisation (WTO). Ngozi Okonjo-Iweala, the WTO's Director-General, asserts, "The WTO continues to be the bedrock of the multilateral trade framework."

Others contend that profound alterations are essential. "We need a new trade system that caters to the demands of the 21st century, promoting fairness and sustainability," declared UN Secretary-General António Guterres.

Echoing this perspective, World Bank President David Malpass, German Chancellor Olaf Scholz, and Indian Prime Minister Narendra Modi are united in their conviction that the present trade system warrants reform.

As such, global trade stands at the threshold of sweeping transformation. What challenges and prospects does this new epoch present?

Initially, there's a shift in hegemony. The US and EU, long-standing titans of global trade, are witnessing a gradual erosion of their stature. Concurrently, emerging economic forces—China, India, Brazil, among others—are ascending, amplifying their clout over commerce.

Secondly, there's a marked surge in regional trade consortiums. Entities like the Trans-Pacific Partnership, the Comprehensive Regional Economic Partnership, and the African Continental Free Trade Area are reshaping global trade dynamics.

An increasing number of nations are forging regional trade pacts, diminishing barriers amongst member states. Moreover, the European Union strives for a more cohesive internal market, anchored in free trade and competition. China's One Belt, One Road initiative aspires to forge new commercial pathways linking Asia, Europe, and Africa. Yet, numerous countries persist with protectionist strategies to shield their domestic markets from external rivalry.

Thirdly, the spotlight turns to the digitalization and evolution of e-commerce. The burgeoning realm of online trade is unlocking novel avenues for enterprises and consumers alike. The burgeoning adoption of cutting-edge technologies, such as blockchain, is enhancing the transparency and efficacy of trade dealings. "Addressing trade quandaries necessitates the removal of inequitable obstructions and augmenting supply chain lucidity through digitalization," articulated Kazakhstan's President Tokayev.

Lastly, the fourth pillar, indispensable in today's economic discourse, is sustainable development and climate change mitigation. Specialists underscore the imperative for the trade system to integrate the ecological aspects of commerce and to encourage the production of eco-friendly goods. Furthermore, it should strive to diminish disparities both internationally and domestically—ensuring universal opportunities rather than exclusive advantages for a minority.

The genesis of a novel global trade system is undeniably intricate and protracted. Yet, it is evident that its future will be characterized by multipolarity, augmented openness, fairness, and sustainability.

Role of Azerbaijan

In the evolving landscape of a new multipolar trade system, Azerbaijan stands poised with boundless opportunities to serve as a conduit between the East and the West. Strategically positioned at the juncture of Europe and Asia, the nation boasts exceptional geopolitical promise. It shares borders with five countries, enjoys proximity to the Caspian Sea and the Black Sea region, and is integral to transcontinental transport routes. Presently, Azerbaijan is channelling efforts into the modernization and enlargement of its transport infrastructure, encompassing railways, highways, ports, and airports, while collaborating with both regional and global partners to enhance transit pathways and establish logistic hubs.

Moreover, the nation has secured free trade accords with various states, broadening its reach into new markets. This expansion is furthered by diversifying its export array with an increased focus on non-oil exports. There lies considerable potential in nurturing the non-oil sector, which garners attention from international investors.

Engagement in regional initiatives also fosters trade development and bolsters investment inflows, supported by favourable tax and customs frameworks.

Azerbaijan's historical significance on the Silk Road also earmarks its pivotal role in the enactment of China's "One Belt, One Road" initiative. The prerequisites are in place for Azerbaijan to emerge as a central transit node within this ambitious endeavour. Amidst geopolitical shifts, the nation is in pursuit of fresh alliances. And China, with its ascending economic might, is becoming an increasingly appealing ally. The trade exchange between the two nations surpassed $3 billion in 2023, registering impressive double-digit growth. Azerbaijani Economy Minister Mikayil Jabbarov, in conversation with Chinese broadcaster CGTN, acknowledged China as a vital commercial ally for Azerbaijan. "We have a permanent trade mission in China. A number of Chinese companies spearhead projects in Azerbaijan in renewable energy, industrial production, and collaboration within industrial parks, which underscores this partnership," Jabbarov stated.

This collaboration is underpinned by robust political ties. "Azerbaijan endorses the policy of a unified Türkiye, laying a solid foundation for our bilateral relations," underscored Jabbarov.

It is evident that Azerbaijan, with its advantageous geographic position straddling the East-West and North-South transport axes, is emerging as a strategic hub for China's ambition to broaden its commercial pathways.

"We represent the most direct route linking China to Europe via Central Asia, the Caspian Sea, and Azerbaijan," highlighted Mikayil Jabbarov.

In dialogue with the Global Times, Hikmet Hajiyev, the Head of the Foreign Policy Department of the Presidential Administration, remarked, "The collaboration between Azerbaijan and China is distinguished by strong political connections." He also observed that the scope for commercial partnership between the nations is yet to reach its full potential.

"Our aspiration is to welcome an increased presence of Chinese companies on Azerbaijani soil. Their contributions are already vital to the diversification of our economy, yet we anticipate more, particularly in line with Azerbaijan's trajectory towards green growth," added Hajiyev.

Digital transformation remains a priority within this cooperative framework, serving as a cornerstone of Azerbaijan's sustainable development agenda. "In our green transition, we view China as an instrumental partner. Their prowess in the electric vehicle sector is among the global best. We have commenced procurement of electric buses and other apparatus from them, but our ambition extends beyond—we aim to establish joint production ventures in Azerbaijan," noted Hajiyev.

Collaboration within the ambit of the One Belt, One Road initiative is pivotal, with the Middle Corridor poised to act as a linchpin between China and Europe. "Azerbaijan, alongside other Central Asian nations situated by the Caspian and Black Seas, can be steadfast allies in this venture. This partnership is not merely economically advantageous but also underscores the strategic rapport between China and Azerbaijan," asserts Hikmet Hajiyev.

The emergence of Silk Road 2.0 is undeniable. With its strategic locale and enterprising aspirations, Azerbaijan is prepared to assume its role. Concurrently, Baku could emerge as a crucible for dialogue and collaboration bridging Eastern and Western nations.