The traditional pattern of development has been that world trade volume grows at around double the rate of global GDP. In the period 1990-2008, for instance, global real GDP expanded at a yearly rate of 3.2%.
So will the former healthy trend line return?
The main causes of the decoupling from the former positive rate of world trade growth are the economic problems that have prevailed in the euro-zone. Trade between the member countries of the EU is counted as part of world trade and accordingly the euro-crisis has had a particularly damaging effect. It was thought that trade in Europe would pick up in 2013 but, generally speaking, this prediction has not come true, although there are some signs of an upturn in the last couple of months.
The WTO expects that the normal 2:1 structure between trade and GDP growth will return gradually over the next few years. There are many, however, who do are not so optimistic.
One interesting assumption is that the export led growth that has stimulated the growth of emerging economies in recent times has run out of steam. Equally, there are those that feel the sluggish recovery in import demand in mature economies will continue to persist – there will be no strong uplift. Also cited as a brake on trade growth is a rise in protectionist measures, many of which have been introduced in stealth mode among the G20 members.
Reflecting the latter situation, Roberto Azevedo, director general of the WTO, has highlighted in frank terms the ‘paralysis’ of the multilateral process for trade liberalisation and set an agenda of trade facilitation for the WTO. Estimates suggest that a range of trade facilitation measures could increase global GDP by $960bn and there is also the potential bonus of US-backed Atlantic and Pacific regional trade agreements.
The general situation nevertheless remains unclear as to whether there will be a return to a more buoyant world trade scenario.
