The meeting of G-20 finance ministers has just been concluded in Germany but there is still a dark shadow of uncertainty hanging over global trade. To start with, the Communiqué released after the meeting provides reasons to be worried about global economic trends because of the things it didn’t say on trade.
For instance, the G-20 finance ministers practically refrained from making the usual commitment to foster cooperation on global trade. In fact, the G-20 finance ministers seemed hesitant to discuss or mention trade – “trade” was mentioned two times in this communiqué – ”trade” was mentioned 40 times in the communiqué from the last G-20 finance ministers meeting that held six months ago.
From the foregoing, one could make two submissions. The first submission is that the G-20 finance ministers are passing up the responsibility of sorting out the brewing issues in global trade to their political leaders. The second submission is that the G-20 finance ministers are probably clueless on how the geopolitical tensions could affect global trade. The fact that G-20 finance ministers don’t know where the global economy is headed suggests that traders and investors can expect increased volatility in the markets going forward.
Increased uncertainty brewing in the global equity markets
The lack of concrete information on global trade from the last G-20 meeting of finance ministers is sowing the seeds of concerns in the global economic landscape. The performance of equities in the global market suggests that traders and investors are worried that protectionism might become the order of the day at the expense of free trade.
The fears of increased geopolitical headwinds if trade wars begin is already triggering increased uncertainty and its attendant volatility in the global equities market. As at market open on Monday, March 20 (the first trading session after the G-20 meeting) global equities were mostly choppy. In Asia, Japan’s Nikkei 25 was down 0.35%, China’s Shanghai was up 0.41%, South Korea’s Kospi was down 0.5%, Hong Kong’s Hang Seng was up 0.6%, and Taiwan’s Taiex up 0.1%.
Here’s you could get trading direction in a directionless market
It could be very hard to make sense of where the markets are headed after G20 finance ministers failed to denounce protectionism in the global economic landscape. Nobody knows the extent to which increased protectionism will alter the balance of the markets but stakeholders agree that we will see increased market volatility as the world transitions from an era of free trade into an era of protectionism.
Institutional investors are in a better position to navigate the upcoming market uncertainties because they have better access to market data and they have strong cash positions to make volume trades and hedge such trades. However, individual retail traders are exposed to greater risks in times of increased market volatility. In fact, retail traders might only have one opportunity to get a trading decision right after which the capital invested in the trade is as good as lost.
However, social trading is an innovative trading strategy that helps retail traders to improve their odds of making winning trades. What is social trading? InvestinGoal defines social trading as a form of trading that ” allows the investor, even if inexperienced, to copy automatically the financial transactions made by one or more professional investors inside a trading network.” In essence, retail traders can leverage social trading platforms to copy the trade of professional and experienced traders in order to improve their chances of trading success.
Of course, social trading suggests that you are placing the fate of your trading success on the reliability of the trading decisions made by other traders. If such traders make erroneous trading decisions, you would have copied the poor trading moves and you’ll most likely lose money on the trade.
Wildlife campaigners are at odds over a new attempt to ban the global trade in polar bear parts.
Some activists say the market for rugs and ornaments made from the bears is driving them to extinction, but others argue that the most pressing problem for the species is climate change and the disappearance of polar ice.
The issue will be decided at a UN wildlife conservation meeting in Thailand in March 2013.
The Humane Society International/UK says that polar bears have been brought to a tipping point by climate change but that increased hunting in recent years is pushing the species “beyond the brink.”
“The drivers for the increase in recent years in the trade in polar bear parts are the extremely worrying and rapidly increasing prices being paid on international markets for polar bear parts,” said Mark Jones, executive director of the Humane Society International/UK.
He points to the fact that in the five years up to 2012 there has been a 375% increase in the number of polar bear skins offered at auction, some selling for as much as $12,000.
Every year around 600 bears are legally killed by hunters in Canada and in the decade to 2010 more than 30,000 bear parts were traded as trophies, rugs and ornaments.
Opponents of the trade have now proposed a ban on the international sales of polar bear parts. It will be tabled at the next meeting of the Convention on the trade in endangered species (CITES) taking place in Thailand next March.
Wildlife campaigners are at odds over a new attempt to ban the global trade in polar bear parts
The move is being supported by the US and Russian governments. The last time an attempt was made to change the ruling in 2010, it was defeated after the UK and the EU voted against. Mark Jones believes the UK government’s position is very influential and wants them to support the ban.
“We urgently need the British government to step forward and be a champion for polar bears by supporting their maximum protection,” he added.
But some prominent campaigners are against changing the protected status of the bears. WWF has had a long association with the iconic species but believes that the threat from international trade is not significant compared to the threat from climate change.
“If we were tempted to support it on the basis of trade being a major threat, it is not,” says Dr. Colman O’Criodain, WWF’s wildlife trade policy analyst.
“We have to focus on what is the major threat and not distract ourselves with a relatively minor one. We can’t be arguing for the science when it suits us and then ignore it when it doesn’t suit our case.” he added.
WWF are supported by other groups including Traffic International and IUCN. But Mark Jones says the Humane Society International have broad support for their position as well.
“We’re members of a very big campaigning group called the species survival network and we do believe we have a very wide consensus among groups on this particular issue,” he said.
Dr. Colman O’Criodain says that WWF won’t actively campaign against the ban and will accept it if it is voted through. But he argues that would be a bad outcome for polar bears.
“You could say that this is just a distraction factor and that it could have the effect of making people think something has been done to address the threat when the net effect will be almost negligible,” he said.
Indigenous groups in Canada are actively working against the proposed ban. And they particularly resent the fact that the US is leading the charge for change.
“The American government is using the threat of climate change to justify banning the international trade in polar bear parts while utterly failing to do anything to reduce their own activities,” said James Eetoolook of the Nunavut Tunngavik, a group that represents Inuit interests.
They argue that their own research in the western Hudson Bay region carried out earlier this year indicated that bear numbers were increasing rather than declining.
Campaign groups in favor of the new ban are taking comfort from the fact that some governments are still undecided.
A spokesperson for the UK’s department of the environment, farming and rural affairs added:
“We are currently considering the proposals ahead of the Conference of the Parties meeting next year.”
