The Global Order Is Changing: Who Will Lead and Who Will Follow?

At the Djibouti Investment Forum in April this year, we highlighted an emerging trend: economies in the Global North are strategically reorienting their trade and supply chain links toward the Global South. This shift is driven by both economic and geopolitical considerations, aiming to reduce dependence on a limited number of major partners, particularly the United States, following recent increases in tariffs on imports from third countries. While our theory has been initially debated, this trend has now become increasingly evident. However, this reorientation is also a source of risks for the Global South. While Northern economies seek secure access to essential raw materials and energy critical for their green and digital transitions, poorly structured trade agreements can reinforce asymmetric dependencies. In such scenarios, countries in the Global South could continue to supply raw materials while receiving limited opportunities for high-value manufacturing or technological investment, becoming the sacrificial lambs of these shifts.

The shift of trade flows toward the Global South was anticipated by the Boston Consulting Group (BCG) in a report issued earlier this year which projected the rise of the Global South as a major force in world trade. The study highlighted that trade between developed and developing countries has been growing at a compound annual growth rate (CAGR) of 3.7% in the latest 5 years, and is expected to add further $1.67 trillion over the next decade. The report also emphasized that major shifts in U.S. trade policy (such as those under the administration of President Donald Trump) would have further accelerated these dynamics.

The EFTA-Mercosur Free Trade Agreement (FTA) signed in September 2025 exemplifies this reorientation. It is far from an isolated case. The recently concluded negotiations between the European Union and Indonesia, as well as the ongoing ones between the EU and India, further illustrate this pattern. These agreements are a direct response to rising protectionism and geopolitical tensions, which have exposed the vulnerabilities of supply chains that are overly concentrated and often unidirectional, heavily dependent on a few consolidated markets. By forging new trade partnerships with countries in the Global South, Northern economies aim to diversify and geographically spread their value chains, reducing reliance on a limited set of suppliers and enhancing their capacity to withstand and adapt quickly to disruptions arising from geopolitical shifts.

For the Global North, the Global South presents significant opportunities. This region is rich in critical raw materials essential for green energy and digital transitions. Beyond raw materials, rapidly growing economies and expanding middle classes also provide strong incentives to deepen trade relations. Trade agreements serve as tools to access dynamic consumer markets expanding faster than those in many developed economies. For example, the EFTA-Mercosur FTA grants EFTA members access to a growing market of over 270 million consumers.

In this evolving landscape, African nations are especially attractive to the Global North, with their abundance of critical resources and rapidly growing consumer markets. On the other hand, these trade agreements also provide African countries with an opportunity to engage more fully in global value chains (GVCs). However, this opportunity comes with risks. Without deliberate strategies, African nations could remain dependent on raw material exports, while unequal trade relationships may reinforce asymmetric dependencies, limiting their access to high-value manufacturing and technological investment.

To capitalize on this trend, African nations should adopt a strategic and coordinated approach:

• Prioritize value addition and investment: Launch projects and attract investments in higher-value activities, such as metal refining, agro-processing, and other industrial segments, to move beyond raw material exports and capture greater economic benefits.
• Strengthen infrastructure and logistics: Improve port facilities, trade corridors, and regional transport networks to better integrate with GVCs. Reducing prohibitive transport costs is essential not only for enhancing Africa’s participation in GVCs but also for facilitating the growth of intra-regional trade.
• Pursue balanced and coordinated trade agreements: Engage strategically with both Northern and Southern partners by negotiating collectively rather than as individual economies. Many African countries are too small individually to secure favorable terms in international trade negotiations. In this context, the African Continental Free Trade Area (AfCFTA) offers a platform to enhance collective bargaining power. By uniting 54 member states under a single trade framework, the AfCFTA has the potential to transform Africa from a bunch of small, fragmented markets into a coherent economic bloc with significant negotiating weight on the global stage. Such collective leverage could allow African nations to obtain better terms in trade negotiations, while also aligning trade agreements with long-term development and industrialization objectives. However, the AfCFTA currently faces institutional limitations. It lacks supranational bodies empowered to negotiate trade agreements on behalf of all member states, leaving each country to negotiate individually in practice. Similarly, the African Union Commission does not hold formal authority to conclude international trade agreements, which constrains Africa’s ability to act as a unified negotiating entity. Strengthening these institutional mechanisms (potentially through the creation of a centralized negotiating body or by delegating limited negotiation powers to the AU Commission), would be critical to translating Africa’s collective economic potential into concrete gains in trade agreements. In the absence of such institutional capacity, African countries must carefully coordinate their positions, harmonize trade priorities, and adopt a shared strategic vision to maximize the benefits of any trade agreement while mitigating risks of asymmetric dependencies and unequal terms. Historically, however, achieving such cohesion has proven to be a significant challenge.

Africa stands at a crossroads in the North-South trade realignment. Its abundant resources and growing consumer markets provide immense opportunities for profiting of the ongoing reorientation of trade flows from Global North economies. By strategically investing in value addition, infrastructure, and diversified trade partnerships, African countries can transform themselves from raw material suppliers into competitive participants in GVCs. The choices made today will determine whether Africa seizes this moment to shape its own economic destiny or will remain on the margins of a rapidly transforming global trade order.