WTO Suggests Global Trade Recovery May Have Already Peaked
March 10, 2021
Although global trade fared better in 2020 than expected, the World Trade Organization estimates that the recovery has peaked, and anticipates continued challenges for the year ahead.
The WTO’s latest Goods Trade Barometer, published in late February, indicates that the decline in global trade volume last year was less pronounced than the 9.2% drop it predicted earlier, thanks to a strong performance in the third and fourth quarters.
However, its authors are more conservative with their outlook for this year —
“The outlook for merchandise trade will depend to a large extent on the evolution of the virus and the dissemination of effected vaccines.”
On the other hand, Everstream Analytics, formed this month out of the merger of supply chain risk analytics firms Resilience 360 and Riskpulse, has not found any indications of a looming downturn, according to CEO David Shillingford.
He sees good potential for further growth, suggesting much momentum is still trapped by lockdown measures caused by COVID-19.
Developments in the European Union and Brexit suggest that both the EU and the UK will be facing headwinds, whereas predictions for US trade, notably imports, remain positive. The upward momentum has not been slowed by equipment shortages, nor the escalating rates in their wake.
Some sectors have seen a shift to domestic or regional markets, such as US produce shippers pivoting from China to the domestic arena. Medical devices have also seen a stronger focus on domestic or regional markets, to some extent due to export restrictions.
“Our research shows that shippers are more likely to stay dispersed to diversify supply chain risks,” said Ms Shamal.
These preferences may be strained by protectionist moves. Last month, the International Chamber of Shipping noted that 98 countries had set up temporary export restrictions or bans in the pandemic, which are hampering global trade.