02 Aug Cross-border deals in the post-Covid world
With nations largely withdrawn from the outside due to the pandemic, law firms are now updating their borderless strategies to deal with a new era of international relations. Challenges presented during the pandemic such as equal access to supplies and raised costs have pushed governments in developed and developing countries alike to strategize investment on localised production for less reliance on global supply lines. While this stands to have a good impact on carbon emissions and lower logistics costs, new agreements and policies will need to be put in place to support positive growth in this direction. Meanwhile shifts in trade and international agreements have made it necessary for governments to update global policies.
Interestingly, cross-border mergers and acquisitions (M&As) by volume and count were the lowest in 2020 since 2013. However, shares of activity related to M&As remained equal to 2019. Europe saw the greatest amount of volume in this area, with $423 billion worth of deals, a 3.6% year-on-year increase. As the worldwide economy begins to heal, more M&As are expected. Research and advisory firm Gartner predicts a huge surge of M&As in 2022 that will outmatch 2018 highs, particularly in the tech sector. While paradigms may be shifting, the need for cross border legal actions remains firm.
Although merchandise trade flows decreased by 7 percent in 2020, trade picked up in the first quarter of 2021 by 10 percent compared to the same quarter in previous year. According to the World Trade Organization (WTO), the volume of international trade will pick up by 8 percent in 2021, having fallen 5.3 percent in 2020. The WTO, along with the International Monetary Fund, World Bank Group and World Health Organization, recently issued a statement saying that a $51-million investment is needed to increase manufacturing capabilities, supply, trade flows and delivery for equitable distribution of medical supplies.
In July 2021, the WTO urged governments to increase transparency and the amount of collected data by installing an international framework for data collection in the trade of international goods. The request is preceded by a large surge in the movement of medical shipments and the spread of the COVID-19 virus. Benefits to their plan include greater data sets to find and smooth out bottlenecks in global trade and identify trends to reshape policies. However, new international laws will need to be written for this to happen.
No Comments