Consumer sentiment and therefore trade with Europe is being affected by fears that the Ukraine war will spill over into neighbouring countries and the rest of the continent, coupled with financial pressure due to persistently high inf lation.Consumers are more than a little punch drunk after the sovereign debt crisis which started in 2009, Covid-19 lockdowns, the Brexit vote (June 2016), sanctions against Russia which started with the 2014 Russian invasion of Crimea, followed by the attack on Ukraine. Compounding these challenges is the current round of international trade disputes.In a European Parliament briefing, researcher Gisela Grieger states that a blockage of new appointments to the World Trade Organization (WTO) Appellate Body (AB) by the United States “has challenged the legitimacy both of what has often been referred to as the WTO's 'crown jewel' and of the WTO as an institution set up to uphold the rules-based multilateral trading system. “Since December 2019, the AB has been unable to hear appeals and so first-instance panel reports appealed by the losing party have remained without a final binding ruling, undermining the winning party's right to enforce its rights under WTO law.”South African citrus producers are using the WTO to challenge the EU's prohibition on the importation of South African citrus fruit affected by the black spot fungus and the false codling moth.SA requested the establishment of two panels at a meeting of the Dispute Settlement Body (DSB) of the WTO to examine what, in South Africa’s view, are unscientific and discriminatory measures placed on citrus imported from SA by the EU. This is the first time that SA has taken a WTO dispute beyond the panel stage of the established DSB process.McKinsey & Company’s ConsumerWise team reports that, although there was slight improvement in European consumer optimism in the second quarter of 2024, “most consumers continued to report having mixed feelings about the economy. “As we’ve seen for much of the past year, consumers across Europe said they continued to trade down”.The improvement came from younger consumers who, unlike the older generation, reported that they were willing to spend more on eating out and travel.“Consumers who reported feeling optimistic attributed their feelings to stabilising inf lation rates, while consumers who felt pessimistic about the economy blamed their woes on ongoing international conf licts and the challenges posed by climate change,” the study found.The most optimistic consumers were in Germany a nd It a ly.
