I have recently been in Dubai where the ACT was generously invited to deliver the treasury workshop at the latest GTR MENA Trade Finance week. The ACT and GTR have been associated in this way for a few years now in the UK, Middle East and Singapore and it allows us to reach a trade finance audience we don’t always see.
Unfortunately, the date, 14 February, meant being away from home on Valentine’s Day but it was for a good cause of course.
The big theme in trade at the moment is, well, the lack of it or, rather, the decline in physical trade over the past 3 or so years.
There’s no one obvious answer – import substitution, protectionism, poor measurement and even on-shoring of some manufacturing in the West – but it’s got everyone’s attention. Governments, multi-lateral agencies, the financial services and fintech communities let alone those in support services are all looking at ways to arrest the decline. And no, I’m not talking the ‘T’ word yet. Trade in services is relatively stable but it’s always been the smaller sibling as so much services business remains in domestic economies.
Despite the angst, there’s some positive news.
Digitisation – everything from straightforward automation up to the promise of distributed ledgers (blockchain) – is leading the way especially for emerging markets.
Liquidity (money as once known!) is the link between the old and new ways of business and here new players and platforms are showing themselves capable of generating an audience if not, yet, driving major change.
The relationship between trade (especially goods), finance and treasury has always been quite complex and some treasurers won’t necessarily be active practitioners although for some it’s bread and butter. There is a distinction between managing business flows (particularly cash) and the nitty-gritty of incoterms, export credits and import duties and it’s always instructive to see how others do their work. What’s key for treasurers is digging ‘into the weeds’ of a business and then harnessing the full range of our competencies – for example in risk management, liquidity and banking and financial management – to generate growth and reach the strategic aims of our businesses. It takes a lot of effort but it’s worth the trip!
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