Trade likely to grow by 13.5% in 2010, WTO says

Following faster than expected recovery in global trade flows so far in 2010, World Trade Organization economists have revised their projection for world trade growth in 2010 upwards to 13.5 percent.

By ·

Following faster than expected recovery in global trade flows so far in 2010, World Trade Organization economists have revised their projection for world trade growth in 2010 upwards to 13.5 percent.

The WTO’s March forecast was a 10 percent expansion in trade volumes. Merchandise exports of developed economies are predicted to expand by 11.5 percent in volume terms while the rest of the world (including developing economies and the Commonwealth of Independent States) is expected to see an increase of 16.5 percent for the year.

“If U.S. shippers are not involved in global trade now, they should be,” said export compliance expert Beth Peterson. In an interview with SCMR last week, she noted that the time is right for exporters to study new regulatory compliance standards and “get in the game.”

As reported in LM earlier this month, the WTO said the value of world merchandise trade rose around 25 percent in the first six months of 2010 up strongly from the same period of 2009.

According to the WTO, this would be the fastest year-on-year expansion of trade ever recorded in a data series going back to 1950. But such a large growth rate should be understood in the context of a severely depressed level of trade in 2009, when world exports plunged by 12.2 percent. The next fastest year-on-year growth was 11.8 percent in 1976, one year after the then unprecedented decline of 7.3 percent in 1975.

“The strong recovery of trade signals improved economic activity worldwide,” said WTO Director-General Pascal Lamy. “This surge in trade flows provides the means to climb out of this painful economic recession and can help put people back to work. It underscores, as well, the wisdom governments have shown in rejecting protectionism.”

World merchandise trade rose sharply in the first two quarters of 2010, driven by the recovery of GDP in both developed and developing economies. Most economists expect output growth to slow in the second half as fiscal stimulus measures expire and the inventory cycle winds down. This is likely to restrain the growth of trade in the second half of 2010 compared to the first half.

The global trade growth projection is consistent with the WTO Secretariat’s time-series model for import demand in a range of advanced economies, and assumes a reduced rate of GDP growth for developed countries in the second half of 2010 rather than an absolute decline.

Risks to the forecast are mostly on the downside, particularly if an unforeseen financial or macroeconomic shock triggers another economic downturn. However, some upside potential exists as well if growth is better than expected in the second half of the year.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

· All Topics
Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo