International trade expert Steven Okun has indicated that the ongoing “era of uncertainty” in global trade, initiated by former US President Donald Trump’s tariff policies, is likely to continue without a clear return to the pre-Trump trade framework. His remarks come as nations, particularly smaller economies like Fiji and others in the Pacific, face increasing pressure to band together and negotiate collective trade agreements with the US.
Okun, the founder and CEO of APAC Advisors and a veteran of the Clinton Administration, expressed concerns during his recent visit to Fiji. He characterized the current situation as a prolonged transitional phase, warning that the unpredictability could persist for years. This unpredictability is further compounded by the uncertainty surrounding potential successors to Trump, who could take either a cooperative or a more aggressive stance in trade relations.
The United States has dramatically shifted the global multilateral trading framework that had been in place for the last 80 years, fostering a trend toward regional trading blocs. He suggested that Pacific nations should explore such collaborations to enhance their bargaining power. “Countries are creating plurilateral systems or regional trading blocs, and this is something that Fiji should be part of,” Okun commented, referencing agreements like ASEAN, CPTPP, and RCEP.
Notably, recent discussions in the Fijian Cabinet hint at ongoing negotiations aimed at establishing a potential US-Fiji Agreement on Reciprocal Trade, as outlined last week. However, Okun shared skepticism regarding the aggressively set August 1 deadline for the activation of reciprocal tariffs against about 90 countries, including Fiji, which may impose a hefty 32 percent duty on Fijian exports.
This landscape had already been concerning for Fijian exporters, who find themselves on edge as discussions surrounding tariff implications and trade relations remain fluid. The uncertainty has led to hesitance among American businesses regarding investments and future expansion possibilities, catalyzing concerns for Fiji’s economic stability.
In light of these global fluctuations, there is cautious optimism among analysts that strategic negotiations could enable Fiji to not only stabilize its trade relations with the US but also uncover new avenues for growth amidst a challenging economic climate. The continued focus on maintaining high standards for exports and nurturing diplomatic ties will be critical for Fiji as it navigates these complex global trade dynamics.
As the situation unfolds, both the government and trade experts encourage resilience and adaptability to transform challenges into opportunities in a rapidly changing international landscape.
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