By: Jhanvi Tripathi and Samriddhi Vij
The following excerpt is from Chapter 7 — Building a Resilient Trade Architecture in the Global South of ORF Global Quarterly: Disruption and Recalibration.
Over the past few years, tariffs, export controls, and regional conflicts have disrupted global trade, and Trade Policy Uncertainty (TPU) has led to supply chain shocks. From food supply chains impacted by the Russia-Ukraine war to TPU caused by the United States’ (US) tariff policies, and most recently, the war in the Middle East which has created an oil and gas crisis as a result of the closure of the Strait of Hormuz and continued attacks on infrastructure in the region. Moreover, traditional trade routes have struggled to accommodate the typical volumes that traverse them, making the search for new routes and new markets a defining feature of the past decade. These disruptions have exposed the fragility of existing trade architecture and accelerated efforts to build more resilient and diversified alternatives.
As estimated by the UN Trade and Development (UNCTAD), nearly two-thirds of global trade takes place within value chains. However, policies have not adequately recognised that the next frontier of trade that must be unlocked is South-South Trade. A BCG analysis shows that countries in the Global South are the fastest growing consumer markets with their growing and increasingly aspirational populations. Fulfilling this potential requires addressing deep connectivity gaps—whether physical, institutional, or digital—that have implications for the speed and cost of doing business.
The focus of global industrial policy—which includes economic diversification, technological sovereignty, or job creation—has shifted to the Global South. These countries are going through rapid industrialisation in a rapidly digitising world. They must address the traditional brick-and-mortar industrial issues of hard manufacturing while also keeping up with the age of internet technology. This transformation is unfolding even as some of these countries, particularly in Africa, experience significant political shifts.
The vulnerabilities of the past decade have exposed how precariously the Global South's integration into the world economy remains tethered to fragile infrastructure, strategic chokepoints, and inherited institutions. Learn more about what a more resilient trade architecture for the Global South would actually require in ORF Global Quarterly: Disruption and Recalibration.