Merz proposes global alliance on rules-based trade, cites India as partner for supply chain diversification

SEOUL: Making a bold statement, German Chancellor Friedrich Merz proposed a global alliance on rules-based trade, including WTO. Merz was speaking at 19th Asia-Pacific Conference of German Business in the South Korean capital that has assembled more than 800 German companies. Merz has been on a week-long tour of East Asia with stops in Singapore, Japan and South Korea.In each country Merz has tailored his message to address trade imbalances and supply chain disruptions on account of wars, great power competition, and weaponisation of economic interdependencies.“It is a key objective of the German government to facilitate ties in the Indo-Pacific region and build trusted partnerships… We are working with regional heavyweights like India and others… to diversify supply chains, reduce single-source dependencies, and derisk,” Merz asserted. The German Chancellor also highlighted challenges faced by current geopolitics, “When supply chains become political pawns, when access to key technologies is obstructed, or when efforts to secure raw materials resemble displays of power… this jeopardises, growth, prosperity and security of entire regions”.Merz also highlighted Europe's efforts to bolster free trade, citing recent trade agreements, including that with India. Germany has been trying to maintain a delicate balance – find alternative markets and manufacturing bases outside China without completely decoupling from Beijing. Russia's war against Ukraine has imparted urgency to this strategy, with Beijing seen as helping Moscow evade Western sanctions and keeping the latter's war machinery going.Plus, growing competition from China in traditionally German-dominated sectors such as automobiles, especially in the electric vehicles category, has seen Berlin double down on the demand for fair and balanced trade.You use AI every day. Now get your AI Quotient. Take the AIQ test.