In the first round of the US presidential election debates, Republican candidate Donald Trump was in his usual self, pounding away on the free trade agreements that he claimed were destroying jobs in the United States, while his opponent Hillary Clinton was trying to distance herself from those trade pacts.

Obviously, they both have taken to heart the anti-globalization sentiment of the American voters. This tilt toward protectionism, not only in the United States but also in some other major importing economies, is posing a serious threat to Hong Kong as a regional hub for international trade.

The outlook on this front is grim indeed. The World Trade Organization (WTO) has slashed its global trade forecast for this year to 1.7 percent - down from its April estimate of 2.8 percent. The revised rate of trade growth is the slowest since the outbreak of the global financial crisis in 2009.

Among the reasons cited by WTO for the slowdown in global trade are the absence of further trade liberalization and "creeping protectionism". The stubbornly high unemployment rates in some major economies in Europe have triggered a backlash against globalization. Although the US job market has improved significantly in recent years, some economic analysts have blamed the widening wealth gap on the loss of many well-paid manufacturing jobs to competition from imports.

There seems to be little hope of improvement in 2017 as global economic growth is widely expected to remain sluggish. Whoever becomes the next US president is expected to steer clear of trade liberalization. Trump has said that, if elected, he would demand better terms for the US in renegotiating the trade pacts and punish those exporters who, according to him, have been taking advantage of the US.

A global trade war could hit Hong Kong hard and there's really very little it can do other than trying to grab a bigger share of the shrinking business by becoming more efficient and cost competitive in trade financing, logistics and transportation, especially air cargo forwarding.

(HK Edition 09/29/2016 page9)