Daily Management Review

WTO Trade Barometer shows world trade sinking down


The growth rate of world trade in the IV quarter of 2019 will remain below the trend line. This is evidenced by the World Trade Organization (WTO)’s indicator "Trade barometer". At the same time, the indicator’s value improved compared to the previous measurement (August of this year), reaching 96.6 against 95.7 points. Note that the figure less than 100 points indicates a decrease in turnover, more than 100 points indicates an increase.

Some indicator sub-indices stabilized, while others continued to decline - in August, all indicators were below 100 points. For export orders, the indicator remained at the level of 97.5 points, for deliveries of cars increased from 93.5 to 99.8 points, and for container traffic even rose above 100 points - from 99 to 100.8 points. At the same time, while the air freight indicator has improved, it still indicates a decrease in activity (93 versus 91.4 points), while there was a decline in the electronics trade against the background of US duties - 88 points (from 90.7 points in August). For agricultural raw materials, the most significant decline was from 97.1 to 91.4 points.

According to statistics on world volumes of exports and imports, in the second quarter of 2019 (no more recent data), the growth in the turnover of trade in goods amounted to only 0.2% (it was much higher (3.5%) in the second quarter of 2018). The new WTO forecast shows that the turnover growth this year will be only 1.2%, while an increase of 2.6% was forecasted in April. Among the reasons for the recession is the negative impact of the duties of China and the United States, as well as a slowdown in the global economy and the uncertainty due to Britain's exit from the EU.

Amid US duties, China’s exports to the US in October fell by 16.2% to $ 35.8 billion, while imports dipped by 14.3% to $ 9.4 billion. Now, US tariffs affect supplies from China to $ 362 billion. Beijing, in turn, is imposing increased tariffs on US imports of $ 120 billion. At the same time, although the Chinese Ministry of Commerce announced on November 7 that China and the United States agreed to gradually reduce reciprocal duties on the supply of goods (it will begin after a preliminary agreement has been reached between countries), details of the transaction, as well as the terms of its possible signing, are still obscure.

source: wto.org