The Growth Of World Trade In 2018 Is Constrained By The Choice Of Policy

- May 17, 2018-

The World Trade Organization (WTO) predicts that global trade growth will be strong in 2018 and 2019, but it also warns that escalation of trade tensions may have affected corporate confidence and investment decisions.

The WTO's latest outlook report points out that, according to the average value of exports and imports, the growth rate of merchandise trade volume reached 4.4% in 2018. This is roughly in line with the 4.7% growth achieved in 2017 - this is the strongest performance in six years.

It is expected that the growth rate in 2019 will slow down to 4.0%, which is lower than the 4.8% annual growth rate since 1990, but has remained steadily above the average of 3.0% since the global economic crisis.

WTO Secretary-General Roberto Azevêdo said: "We have seen strong growth in trade today, which is extremely important for sustained economic growth and recovery and support for job creation."

"However, if the government resorts to restrictive trade policies, especially tit-for-tat trade policies, this important progress may quickly be eliminated. Retaliation is the last thing the world economy needs to solve."

Trade volume in 2017 was the strongest year since 2011. It was mainly driven by the increase in investment and consumption. In the past two years, it was driven by the weak trade situation.

WTO economists said that in terms of analysis of exports and imports, the Asian region has made a considerable contribution to the recovery of world trade growth in 2017.

In terms of exports, in the most recent year, Asia contributed 2.3 percentage points to the global growth rate of 4.5%, accounting for 51% of the overall increase. On the import side, the region’s growth rate with respect to world imports was 4.8%, which was 2.9 percentage points higher, accounting for 60% of the overall growth.

Due to the deteriorating internal and external demand, North America has made an active and substantial contribution to the import and export of 2017 after its trade volume growth was very small in 2016. In Europe, the growth in the import of goods in 2017 was less than that in 2016. As Brazil emerged from the economic downturn, South America and Central America and the Caribbean have made a positive contribution for the first time since 2013.

China's rebalanced economy from investment to consumption is still burning. In 2017, investment projects accounted for about 32% of GDP growth rate, which is lower than the 55% in 2013.

The WTO stated that since China is engaged in a small amount of capital goods, the development of the entire situation may cause considerable obstacles to the growth of world trade, but so far the impact of this process on global trade has gradually declined.