A few days ago, the World Trade Organization (WTO) released the latest global goods trade barometer. The barometer shows that in the fourth quarter of 2020, global merchandise trade volume growth remained strong and has rebounded from the deep decline in the third quarter. But at the same time, as key indicators of global trade appear to have peaked, the pace of trade expansion seen in the fourth quarter of last year is unlikely to continue in the first half of 2021.
The latest reading of the Global Goods Trade Barometer was 103.9, which is higher than the index’s benchmark value of 100 and higher than the previous reading of 100.7 in November last year. This shows that global merchandise trade has improved significantly since the sharp decline in the first half of last year. All sub-indexes are either above trend or at trend levels, but some are already showing signs of decelerating and others may decline in the near future.
In addition, this issue of the Global Trade in Goods Barometer may not fully reflect the impact of the rebound of the epidemic and the emergence of new variants of the virus, and these factors will undoubtedly put pressure on global trade in goods in the first quarter of 2021.
As the two most reliable indicators of global trade, the export orders index (103.4) and the automobile product index (99.8) have recently reached their peak and begun to lose momentum. In comparison, the container shipping index (107.3) and the air transport index (99.4) are still rising. The electronic components index (105.1) and the raw materials index (106.9) are both firmly above trend levels, although this may simply reflect temporary inventory or hoarding.
In the third quarter of 2020, seasonally adjusted global merchandise trade volumes rebounded from the sharp decline in the second quarter, driven by increased exports from Asia and increased imports from North America and Europe. However, after falling 15.6% year-on-year in the second quarter, trade in goods in the third quarter was still down 5.6% compared with the same period in 2019. The figures, while not promising, are better than many analysts predicted at the start of the pandemic. In its global trade forecast released on October 6 last year, the WTO predicted that global merchandise trade volume would fall by 9.2% in 2020, but the actual decline may be slightly lower than this forecast value.
There are various signs that due to the rising global incidence of COVID-19 and the emergence of new variants of the virus, the outlook for global trade in 2021 and beyond is becoming increasingly uncertain. The recovery of global trade will depend largely on the effectiveness of vaccination efforts. Taken together, the growth momentum of global trade may not be sustainable in the future. </p
