Subscribe to our free, weekly email newsletter!


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

image
By Patrick Burnson, Executive Editor
September 29, 2010

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

The study examines the trajectory of offshoring cost arbitrage to low-cost developing countries, the rise of new locations, and the fact that there’s ample room for growth.

In a rare show of solidarity, various trucking interests are asking the Department of Transportation’s Federal Motor Carrier Safety Administration to remove online safety ratings of individual motor carriers until flaws in the CSA methodology are fixed.

While it feels somewhat hard to fathom, the stage is set for the Council of Supply Chain Management Professionals (CSCMP) Annual Conference in San Antonio, Texas.

Carload volumes were up 1.4 percent at 300,388, and intermodal volume for the week ending September 13 was up 5 percent at 279,052 trailers and containers.

Company says the Cloud offering allows customers to respond more quickly to new business opportunities, without significant upfront cost and implementation times.

Article Topics

News · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA