In addition to the great networking opportunities that they offer, I find conferences the perfect opportunity to learn about new topics, catch up on existing ones and to sometimes hear different regional perspectives on those issues.
GTR Singapore was no exception to this and although its primary focus is on trade, there is typically a huge overlap with the issues that treasurers face.
Like our own conferences, the challenge at GTR was deciding which sessions held the most interest for me. Below are some of my highlights and observations.
The keynote was delivered by Michael Every – Chief Strategist from Rabobank.
His message was that the world is witnessing (as a result of recent US actions) the re-emergence of economic statecraft and outlined what he referred to as a “grand macro strategy” in trade.
The traditional approach of economists is to discount politics from their long run analysis as new leaders focus on domestic policies whilst development in international trade and geopolitics moved at a glacial pace. However, Michael’s view is that trade will once again be weaponised to pursue the objectives of the state by a growing list of countries and will become more common behaviour in the future. He described how national security concerns would become more important when considering trade, and protectionist measures could drive a sharper focus on security and jobs over profits. Definitely thought provoking.
Fragmentation / New World Order
A topic that came up in many sessions was how the world was going though a significant change. Whether it’s a return to the norm of the last 2,000 years with India and China reemerging as dominant economies or a realignment of key geopolitical relationships, the relatively benign trade conditions we have experienced for the last two decades seem unlikely to return. It is easy to get carried away but as one of the speakers noted, exports from China have not fallen significantly as a result of the US action. Some of this is due to front loading of orders ahead of the imposition of tariffs but some is also due to a rise in exports to Africa and Southeast Asia. Panellists noted that there was a sense of a disconnect between the regionalisation and fragmentation we are feeling and the reality of trade flows. So, a reminder that there will always be demand for key goods – it may just require more work to find these markets.
Technology
As in previous years there was a great deal of enthusiasm for the potential of technology to create new solutions and ways of working. Whether it’s blockchain, the digitalisation of trade documents or the power of AI, the trade finance space continues to offer a wide range of opportunities to move away from manual, time consuming and expensive processes. However, one of the major challenges remains the lack of harmonisation and the need for companies to access a wide range of different platforms to enable end to end processing of transactions. It reminds me of days before FX platforms like 360T and FXAll when banks were offering their own proprietary electronic solutions. One interesting suggestion was the potential role of AI to accelerate the onboarding process of new relationships. This seems like an area of real benefit and easier to deploy than some of the other use cases. One of the questions from the audience related to fatigue over the glacial speed of real-world adoption and it was comforting to hear that the technology providers haven’t given up on it yet!
One of the more interesting ideas was the idea of outsourcing of trade and trade financing activities. It has the potential to take away the hassle of choosing platform(s) whilst delivering benefits more quickly.
The Role of Treasury
My own session had Francois from Deloitte, Charley Zhang from JP Morgan and Stanley Liu from OM Materials (S) Pte Ltd talking about trade risk within treasury. Key areas of discussion included:
Working capital
The session on working capital noted the impact of disrupted supply chains due to tariffs on increasing demand for working capital. The panellists and audiences agreed that demand had increased but there didn’t seem to be significant issues in financing working capital. It was a reminder to me that as long as you can craft a transparent and coherent argument, there is credit available. However, there were reminders of the need/ benefit of having diversified product lines and customers as well as sources of finance.
Sustainability
Given the change in sentiment in certain corners of the west towards climate change, it was heartening to see a number of sessions devoted to this topic. The region clearly sees the EU’s Carbon Border Adjustment Mechanism and the new disclosure requirements as key drivers in ensuring that sustainability remains a key consideration for treasurers and trade folk alike. Key areas of discussion included:
