BIP January issue: The big protectionism show

Countries and markets are sealing themselves off. International purchasing is facing big challenges. BIP – Best in Procurement, the association magazine of the BME, focuses in its January issue on the possible solutions to remove trade barriers.

Trade conflicts, tariffs, border closures, brexite: after decades of market liberalisation and free trade agreements, there is a trend reversal. Since the financial crisis, a certain distrust of market forces has been spreading in many countries. Worldwide, 10,982 import-related trade barriers have been newly introduced in the past 13 years. Active market observation in order to be able to react quickly to new barriers has therefore become a routine task for most purchasing managers. At present, German companies are directly affected by American interventions due to the replacement of NAFTA by the “US-Mexico-Canada Agreement” (USMCA). This means that cars will only be allowed to be sold duty-free in one of the USMCA countries if 75 percent of the cars are manufactured in North America instead of 62.5 percent as was previously the case, and 70 percent of the cars are made of domestic steel and aluminum. “The requirements of the USA can no longer be easily met with the existing production processes in the country. Supply chains are either becoming longer or products more expensive,” says Olaf Holzgrefe, International Team Leader at the BME. The public debate is often dominated by the trade conflict between the USA and China. But other countries are also taking the opportunity to keep up with the pace and implement restrictions. “In 2018 in particular, many countries were increasingly resorting to trade barriers,” says Johannes Fritz, research assistant at the University of St. Gallen. Purchasers are therefore called upon to continue to adapt their global supply chains to the realities. Some companies are setting up a second or even more supply chains that are as local as possible in order to avoid global sourcing.

Save the Date: The complete article appears in the January issue of the BME association magazine BIP - Best in Procurement, publication date: 24 January. BME members receive the magazine free of charge as part of their membership.

BIP is the trade magazine for managers in purchasing and logistics. The 68-page publication is published by the Bundesverband Materialwirtschaft, Einkauf und Logistik e.V. (BME) and reaches the 9,750 members of the BME and a further 6,000 decision-makers in purchasing and logistics. The magazine is published six times a year.