Express operators have stressed the importance of facilitating global trade and maintaining access to markets around the world in the wake of the election of Donald Trump to the US presidency.
During his election campaign, the business tycoon projected a 'protectionist' stance with regard to the economy, issuing threats to cancel or abandon international trade agreements such as the Trans-Pacific Partnership (TPP), a trade pact linking 12 twelve Pacific Rim countries and which does not include China. The finalised proposal was signed on February 4, 2016, bringing to an end negotiations lasting seven years, but ratification remains pending.
Responding to questions from CEP-Research, UPS said in a statement: “UPS congratulates President-elect Trump just as we have congratulated and worked with every President, and every (US) administration, over the last 109 years. We look forward to the opportunities we will have to advocate our position on key business issues including trade, tax policy, infrastructure and other critical matters that impact us all.”
Commenting on the TPP specifically, the US package delivery firm underlined: “We are still supportive of TPP for the same reasons we have been all along. Importantly, we believe that TPP will create a level playing field for American businesses, and especially for small and medium-sized businesses that have not had the kind of access they need to participate and compete in our global, e-commerce-driven marketplace.”
UPS went on to highlight the effect of free trade agreements on its business. “Historically, UPS' US export volume increases on average 20% with countries after the implementation of free trade agreements. Every 22 packages per day that cross an international border supports one UPS package operations job.”
Earlier this year, UPS was among a number of major companies which pulled financial support for the Republican and Democratic national political party conventions. Some US newspapers claimed that the package delivery giant had decided not to participate in response to the policies and views of the Republican candidate.
But UPS stated at the time: "UPS made the decision last year not to support either political convention when it established the company’s 2016 budget. We will not have a presence at the Republican nor the Democratic convention. It is erroneous to assert or infer that UPS decided not to support the conventions due to the identity or position of a candidate. It was not a political decision, by any means."
Reacting to Trump's election, DHL said that its US business was in growth mode and that the company was looking to continue that momentum also after the decision of the US electorate. “We are convinced that the US will continue to play a constructive role in furthering global trade. Our primary focus is to ensure our customers continue to enjoy the seamless quality service which has become the hallmark of DHL globally,” a brief statement read.
On the occasion of the opening last month of a €230 million expansion of its Leipzig express hub in Germany, Deutsche Post DHL CEO Frank Appel issued a strong denunciation of ‘anti-trade protectionism’ that could hold back economic growth around the world.
In response to questions from CEP-Research about the recent downbeat global trade forecasts from the WTO, the poor political outlook for agreements such as TTIP and TPP as well as ‘anti-trade’ statements in the US presidential campaign, he emphasised that DP DHL is keeping to its global GDP growth forecasts made several years ago in connection with its Strategy 2020, including above-average growth for the international express business.
On trade and globalisation issues, Appel declared in Leipzig: “Germany is one of largest beneficiaries from globalisation. We should be positive about it…. Germany should be positive about CETA and TTIP.” Looking abroad, he cited successes such as Singapore, which “has become one of the most successful states with openness”, and declared: “There is no country on this Earth that is successful with protectionism.”
For its part, FedEx declined to comment on the US election result and the likely impact on international trade. However, FedEx chairman and CEO Fred Smith has previously attacked the “anti-trade rhetoric” of both Trump and his presidential rival, Hillary Clinton.
During the election campaign, Trump had pledged to scrap the North American Free Trade Agreement (NAFTA) and the TTP and impose high tariffs on Chinese and Mexican goods if he reached the White House while Democratic candidate Hillary Clinton did a policy U-turn and said she would block the TTP.
Asked by analysts during a company results call in June which issue FedEx was most concerned about in the forthcoming election, Smith responded: “I would say we would have a hard time putting up a list of the things that don't concern us, given the two candidates’ positions… Obviously we're concerned about the anti-trade rhetoric, a lot of the anti-business positions, and it's very worrisome. But hopefully after the election cooler heads will prevail.”
The FedEx founder underlined that the way to deal with trade disputes “is to negotiate” and not to “threaten them or take all of the huge benefits of trade and throw them away”.
Apart from signing the TPP agreement, February this year also saw the Obama administration pass a new trade act into law which, in addition to modernising and speeding up the customs clearance process in the US, is expected help drive further growth in international e-commerce shipments to the country.
One of the main elements of the Trade Facilitation and Trade Enforcement (TFTE) Act is the provision to raise the de minimis duty-free threshold (of the value of goods) which industry research suggests could generate additional volumes of B2C cross-border traffic.
Both UPS and FedEx applauded the passing of the Act by US legislative bodies. UPS described it as "critical legislation that modernises US Customs and Border Protection.”
It is not clear where President-elect Trump stands on the TFTE Act.
Separately, in a statement released today, the World Trade Organisation (WTO) noted that the number of trade-restrictive measures applied by G20 economies between mid-May and mid-October this year remains high, despite a slight decline against the previous period. It said this was “of particular concern given the continuing global economic uncertainty and the WTO’s recent downward revision of its trade forecasts.”