The findings of HSBC's latest Global Trade Forecast suggest that the acceleration of growth in the EU27 is anticipated in 2014, as opposed to 2015, as was previously predicted, and overall trade in the region is expected to grow 80% by 2026. The Forecast paints a particularly positive picture for Central and Eastern Europe (CEE), as seven out of the top 10 countries (in the EU27 region) are expected to grow their exports most rapidly. Slovakia and Poland, for example, feature in the top three fastest growing exporters in the EU27, increasing activity by 6.37% and 5.93% respectively over the next five years.
These impressive figures allude to a number of emerging trends: CEE countries are not only successfully integrating themselves into global supply chains, but individual countries are increasingly looking outside of their usual import and export remit for opportunities.
Poland, for example, is forecast to grow at a rate of 110% to 2026 - outpacing global trade growth by 6% annually. It will also prove to be the 10th largest emerging trade nation in the world over the next five years. But where do the trading opportunities lie that Poland must take advantage of in order to achieve this growth?
The country has dominated for some time in agriculture, but Poland is also seeing increased trading opportunities in electronic equipment and automotive production. Having created strong international relationships in these sectors, the country is integrating itself into the global supply chain by successfully linking with other countries internationally to buy, sell, manufacture and import and export goods that can then be sold as a complete package to the global market.
For example, in the electronics industry Poland is importing radio parts from China and then processing these for export to Hungary and Germany. This international network has enabled Poland to secure its position in the global supply chain and establish itself as a reliable and experienced manufacturer. Its top-10 emerging growth export partners over the next five years - forecast to be Paraguay, Peru and Malaysia - demonstrate the new markets the country is reaching as a result of its positive integration in the global supply chain.
Other countries within the EU27 are also diversifying from their traditional export markets and making headway into other prosperous sectors. Russia, for example, remains a key player when it comes to exporting crude and non-crude oil, but is also expanding into importing consumer electronics, which will help drive the development of the country's services sector. Russia's printing and ancillary machinery sector, for example, is rapidly growing with imports forecast to grow 11.98% over the next five years - suggesting that the economy is developing its service sector and improving its infrastructure to do so. The growth in Russia's imports of parts for radio, television transmitters and receiving equipment suggests again that services development will be a key focus for the country.
In fact, Russia's overall trade is expected to grow 166% by 2026, which is almost double the world average of 86%, and as with Poland, the country's integration into global supply chains - as it builds trade corridors with China and Japan in the electronics sector - will play a major role in driving this growth.
Having typically relied upon demand for its products such as vehicle production, the Czech Republic is also diversifying from its traditional trade by looking to exporting alternative (electrical) energy to drive growth. With global trade in electrical energy due to increase 9% over the next five years, its increased trade in this sector means the Czech Republic is forecast to increase its exports to Germany by 7% in the same time frame. This represents an exciting growth venture for the country and also provides an opportunity for the Czech Republic to work with global German energy suppliers.
These examples of the ways Poland, Russia and the Czech Republic are diversifying their trade activities represent just a small fraction of the many opportunities the Trade Forecast finds evidence of across CEE. By integrating into global supply chains and considering both traditional and emerging sectors, businesses can adapt to the changing face of world trade by ensuring they remain relevant and indispensable in global supply chains.