The resulting threat for emerging countries would go well beyond a decline in international trade that would hurt them in two ways: By shrinking the international markets for the goods and services they export and earn income from, and by reducing the price of their exports. There also is the danger that a falloff in trade would take away an important anchor for their internal economic management.

Emerging countries with diversified links and trade agreements with the U.S. have tended to do better. This is true not only for relatively large nations such as Mexico but especially for the smaller ones. And understandably so. Such external anchors tend to serve as guardrails for economic policy management. The intensifying anti-globalization shift in the U.S. means more limited prospects for both existing and future links and is particularly worrisome for countries still hoping to conclude new preferential trade agreements.

Even though emerging economies are right to worry less about the Fed, the coast is far from clear when it comes to other adverse external influences. They must continue to navigate an extremely fluid global environment that, for some time, has lacked the stabilizing force of solid fundamentals in the core advanced world. Now, they also must contend with the worrisome prospect of a much more complex and, potentially, less friendly, international trade environment.

Mohamed El-Erian is chief economic advisor at Allianz SE.

 
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