Global Trade Enters a Three-Dimensional Restructuring; WTO Chief Economist Calls for Building 'Resilient' Supply Chains

Robert Staiger, Chief Economist of the World Trade Organization (WTO), said in an interview in Bangkok, Thailand, that a distinction must be drawn between robust supply chains and resilient ones. He explained that true supply chain security does not mean pursuing self-sufficiency in everything, which he called a "robust" approach, but rather having the capacity to quickly find alternative pathways when supplies are disrupted, which he called "resilient." He elaborated that a robust supply chain seeks a supply path that will never break, and countries that adopt this strategy tend to build every industry they need domestically. A resilient supply chain, by contrast, means that if a particular source is interrupted, businesses and countries can quickly find another source within the international trade system. Staiger said that the "robust" strategy of trying to be self-sufficient in everything is not only extremely costly but also seriously departs from the principle of comparative advantage. For this reason, a rules-based multilateral trading system is crucial, because it provides global markets with predictable access conditions and stable supply expectations, allowing countries to rely on the "elasticity and substitutability" of the system rather than falling into self-sufficiency in everything. (Yicai)