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Potential for massive jolt to free trade

The world came together last month in Glasgow to discuss how, together, they could limit global warming and therefore climate change. In the end, it was again like kicking the can further down the road. Achieving a clear, effective deal at a meeting of representatives from 197 countries was always going to be tough. While there was a display of good intentions and agreement on the need for measurable action, the differences on how, who and when were clearly visible.

Countries are at different stages of development. Some have contributed more to greenhouse gases in the past while others have higher emissions now. Everybody wants the maximum amount of gain for the minimum amount of pain. Glasgow saw all these views expressed, and more.

There was a time when developing countries were expected to approve deals that had been stitched by the Western World, but those days are over. Large, developing countries are now big players at global summits and are quite prepared to say “no” to proposals which are not in their favour. The last-minute watering-down of the text on fossil fuels is a reflection of that. The failure by richer nations to deliver on their promise of parting with US$ 100 billion each year for the developing countries is also one of the reasons for global consensus being elusive.

In other big developments, the world was still getting back on its feet and dusting itself off from earlier COVID blows when the discovery of the Omicron variant placed it again on very fragile ground. The financial and commodity markets have already shown nervousness in the form of high volatility over recent days as the world grapples with Omicron’s reach and potential losses. Strict border controls and lifestyle restrictions have already emerged in many countries and we may see more muted celebrations going into the festive period.

On the business front, the EU’s newly-proposed regulations restricting, or hardening, norms for exports of metal scrap to non-OECD countries have only created more chaos within the industry. If implemented, the ramifications would see a massive jolt to free trade and a significant fall-out in terms of economic, environmental and circular economy goals. It is too big a price to be paid for not being able to differentiate between processed raw materials and waste.

This being the final report for the current year, I wish you all season’s greetings and happy holidays ahead.