Global trade stagnates amid wave of protectionism
By Nick Beams
15 July 2016
Recent months have seen a series of warnings from the World Trade Organisation and other international bodies on the slowdown in world trade and the rise of protectionism. But according to Global Trade Alert (GTA), an organisation that monitors protectionism, the situation is much worse than previously estimated.
A report issued by the GTA on Wednesday said the term “slowdown” created the impression that, while it is losing momentum, world trade is still growing and one country’s exports do not come at the expense of others. These “rosy impressions” should be set aside because its analysis revealed that world export volume reached a plateau at the beginning of 2015. World trade was not only slowing down, but not growing at all.
The GTA says it constructed a detailed dataset in preparation for the report that showed that world export volumes came in at markedly lower rates than those of other organisations, including the International Monetary Fund, the WTO and the World Bank.
According to its calculations, falling commodity prices could not account for the fall in the value of world trade in 2015 because they had recovered partially in the last quarter of 2015. The total value of capital goods also fell in the first half of last year and then plateaued, as did consumer goods. It noted that, except for periods of recession, the “plateau” of 15 months stagnation, which affects both advanced economies and emerging markets alike, is “practically unheard of since the Berlin Wall fell.”
There were falls in world trade following the collapse of the dot-com boom in the early 2000s and the Great Recession that followed the financial crisis of 2008. But the fact that the current stagnation has lasted for 15 months “highlights how unusual it is when compared to the global trade dynamics we have witnessed over the past quarter of a century.”
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Global trade stagnates amid wave of protectionism
