Reaching across borders is more important than ever

Fortunately, the worst-case scenario has been avoided. Britain has not crashed out of the European Union without a deal. On January 22, 2020, the UK Parliament approved the Brexit withdrawal agreement negotiated between the UK and the EU. After more than three turbulent years, people and businesses across Europe can breathe a sigh of relief.

For the moment, that is. This is just a first step. The next will be negotiations on the future EU-UK relationship, which have yet to start. Businesses on both sides of the Channel still face considerable uncertainty over the likely results of those talks. But whatever the shape of the final arrangement, I personally find the decision to leave the EU regrettable. It is a severe loss for both sides. 

Unfortunately, we live in a world where the temptation has grown to go it alone and retreat behind national borders. It is no coincidence that last week’s Annual Meeting of the World Economic Forum (WEF) in Davos chose the theme “Stakeholders for a Cohesive and Sustainable World.” Today, more than ever, we need to remind ourselves that going it alone rarely produces the results you desire – and it is outright dangerous given the global challenges that require our collective action. We’re all stakeholders in a healthy planet and a healthy global economy that thrives on the cross-border movement of goods, information and people.

To achieve global progress in all kinds of areas – from fighting poverty to saving our climate – we need more integration. Less integration inevitably diminishes one’s own global influence. Just try to negotiate a balanced trade deal – or any other agreement – with countries like China or the United States when your share of global output is just around 3 percent. To meet these giants eye-to-eye, bundling your strengths with other like-minded countries seems a much better strategy.

The surprising resilience of globalization

Amid all the talk – and some action – toward more protectionism, there are encouraging signs. We have recently witnessed a number of successful efforts to forge closer ties between nations. Two of the most significant were the EU-Japan trade pact and the African Continental Free Trade Agreement. Both came into force in the first half of 2019. Also, in 2019, the EU concluded negotiations on a trade deal with Mercosur.

In Asia-Pacific, negotiations are progressing on the Regional Comprehensive Economic Partnership. If completed, it would link the 10 member countries of the Association of Southeast Asian Nations (ASEAN) with China, Japan, South Korea, Australia, and New Zealand. And on a multilateral level, 22 countries are currently seeking to join the WTO – a testament to the enduring appeal of this institution at the center of global trade.

Furthermore, as the DHL Global Connectedness Index Update 2019 – produced in partnership with NYU Stern – shows, global trade flows proved surprisingly resilient amid escalating tensions in 2018. In that year, global trade connectedness continued to increase. While early data indicate that this trend probably did not continue in 2019, trade’s contribution to the global economy is still close to an all-time high. Also, trade continues to grow in absolute terms, and in its most recent economic outlook, the IMF expects trade growth to recover noticeably in 2020.

Embrace trade to unlock progress

In a time of tension and uncertainty, we should be grateful for such silver linings. They indicate that human collaboration and exchange across borders remain remarkably robust. Now, more than ever, instead of trying to restrict them, we should push for a greater democratization of trade, empowering more people to take part in it.

Trade is a marvelous way to amplify human ability. It helps us to reach beyond our immediate surroundings and work together with people worldwide. Free exchange in a global marketplace enables countless individuals to apply their skills and talents where they are most needed.

And that is becoming easier and easier. Thanks to the digital revolution, global trade is more inclusive than ever before. E-commerce lends itself ideally to smaller firms that never imagined that they could one day compete with larger rivals. Today, an entrepreneur in Bali, Indonesia or Lima, Peru has almost instant access to a vast number of customers. If you have a compelling business idea, now is probably the best time to take your business global.

Opening doors to the world

DHL operates in every country on Earth. We are proud to contribute to the transformative power of this development. For example, when we enable creative entrepreneurs across Africa to sell their goods – such as toys, women’s dresses or natural hair products – to basically everywhere. Or when we help a suit maker in India or a shoemaking startup in Italy to send their tailor-made products to customers in New York or London. Or when we train hundreds of retailers and SMEs in countries like Rwanda in how to best access the global marketplace and start exporting thanks to the internet.

We also work to remove other hurdles to trade, such as long delays, high costs and huge complexities at countries’ borders. Together with institutions like the WTO and the Global Alliance for Trade Facilitation, for example, we are helping governments that want to modernize their customs processes. Reducing red tape sounds like a modest step, but it has large impact. Lowering these kinds of supply chain barriers can even have a greater positive effect than further reducing tariffs.

Creating value across borders

Physical and digital connections between countries have real-world positive effects. They open new doors for millions of people, helping them to earn a living and create further jobs. Connecting people leads to improved lives, and fuels broader economic and social progress. That’s why the ongoing boom in e-commerce is a great opportunity – especially for developing countries.

Despite the current headwinds, be they political or economic, we should be confident about the future of global cooperation and exchange. The coming years will prove sceptics wrong. A substantial retreat from further international integration is unlikely. There is simply too much need for nations to join forces and solve global problems together. And there are too many untapped opportunities for creating value across borders.

That is why I believe the long-term trend toward greater globalization will continue, enabling more and more people to benefit from a connected world.