Global Trade Outlook & Statistics Report

Context

The latest Global Trade Outlook & Statistics Report has been released by the World Trade Organisation.

Key Highlights of the report

Recent Developments and Forecasts

• The report gives the global trade developments into the end of the year 2023 and refers to the forecasts of world trade in 2024 and 2025.
• The document has a breakdown that features the sectors and regions of the merchandise and services trade. More so, it highlights the leading traders.

Special Analytical Section

• For the first time, the report includes a special analytical section that examines the impact of the conflict in the Middle East on sea shipments through the Red Sea and Suez Canal, and its potential consequences for trade in 2024.

Trade Volume and Value

• The WTO expects a gradual recovery in world merchandise trade volume in 2024 and 2025 after a contraction in 2023, which was driven mostly by high energy prices and inflation in advanced economies, particularly in Europe.
• Merchandise trade is expected to grow by 2.6 percent in 2024 and 3.3 percent in 2025 after falling by 1.2 percent in 2023.
• In value terms, merchandise trade fell 5 percent in 2023 to USD 24.01 trillion, but this decline was mostly offset by a 9 percent increase in commercial services trade, which reached USD 7.54 trillion.

Resilience in International Trade

• Despite the fact that the trade atmosphere is very tough, the WTO’s Chief Economist, Ralph Ossa, stresses the competence of international trade.
• Europe was the main force behind the decrease in the global volume of almost minus 1.7 and 1.0 percentage points of imports and exports, respectively.
• In these regards, all countries of the world, which are expected to contribute to the international trade growth for years to come, will participate in the increase of the export and import of goods.

Global Value Chain Fragmentation

• The report also addresses evidence of global value chain fragmentation, which has become a significant concern for international trade.

WTO

• Establishment: The World Trade Organization, which came into existence on January 1st, 1995, replaced the General Agreement on Tariffs and Trade (GATT), an agreement that was signed in 1948. The setting up of it was the outcome of the negotiation following the Uruguay Round (1986-1994) and the Marrakesh Agreement.

• Membership: By the end of 2022, the World Trade Organisation (WTO) has 164 member countries, which also means that it is non one of the largest international associations. Member countries, in fact, cover the bulk of trading countries’ volumes.

Conclusion

The Global Trade Outlook & Statistics Report is a vital resource for understanding the current state and future prospects of global trade. It provides insights into the factors affecting trade volumes and values, regional contributions to trade, and the resilience of the global trading system in the face of challenges.

Source: The Economics Times

UPSC Prelims Practice Question

Q.Which of the following is true about the Global Trade Outlook as of October 2023?

a. The volume of world merchandise trade is expected to grow by 1.7% in 2023 and 3.2% in 2024.

b. The volume of world merchandise trade is expected to grow by 0.8% in 2023 and 3.3% in 2024.

c. The volume of world merchandise trade is expected to grow by 1.7% in 2023 and 3.3% in 2024.

d. The volume of world merchandise trade is expected to grow by 0.8% in 2023 and 2.5% in 2024.

Ans – “b”

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