The joys and sorrows of friend-shoring

For a while now, I’ve been mulling over a detailed look at what I’m calling a battery OPEC but it appears I’m far (far, far) from the only one playing with acronyms.

At the end of June, Reuters’ Andy Hume wrote a column about what he dubbed “A metallic NATO […], though no-one is calling it that just yet.” Hume’s column was about the Minerals Security Partnership set up by the United States and partner countries with the aim “to ensure that critical minerals are produced, processed, and recycled in a manner that supports the ability of countries to realize the full economic development benefit of their geological endowments.”

Washington’s partners in the initiative include Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, the United States, and the European Commission, and I really have no idea what the European Commission is doing on this list since it is not a country but it probably sounded right and proper to include it.

If anyone is surprised by the lineup, please let me know so I can ask why. We’ve got G7 plus a couple of Scandinavian states and South Korea. Save for the Scandinavians, the usual gang — and incidentally the gang that reaped quite a few of the benefits of globalisation. Before the pandemic turned globalisation into chaos.

The idea of friend-shoring emerged before the pandemic was over (if it ever will be) as a means of countering the worst of its effects on global supply chains. The worst of the pandemic’s effects on global supply chains was exposing them for being way too long and complex for anyone’s comfort. So, friend-shorers thought, let’s tweak those chains. And let’s add a moral angle to the whole thing.

So friend shoring is the idea that countries that espouse a common set of values about international trade, conduct in the global economy should trade and get the benefits of trade so we have multiple sources of supply and are not reliant excessively on sourcing critical goods from countries where especially where we have geopolitical concerns.