Recent trends in Global trade

The past few decades have seen important shifts that have reshaped the global trade
landscape. As a share of global output, trade is now at almost three times the level in the
early 1950s.An important factor responsible for this is the integration of rapidly growing
emerging market economies .The expansion in trade is mostly accounted for growth in
non commodity markets, especially of high technology products such as computers and
electronins.It is laso characterized by growing regional concentration and an ongoing
shift of technology content toward EMEs.We can observe the following trends

Expansion in Global Trade:

World trade has grown steadily since world war 2, with the expansion accelerating the
past decade. The current level of world exports is a mostly three times that prevailing in
the 1950s.The expansion in the global trade was featured by following trends.
o The rise of emerging market economies as systematically important
o
o
o
o

trading partners.
The growing importance of regional trade
The growing role of global supply chains
The rising trade liberalization since the early 1950s
The technology led declines in transportations and communication cost.

The world merchandise exports have risen from US $ 3395.4 in billion in 1990to US $
15763.6 in 2008, i.e. by 4.6 times and it has fallen to US $12177.6billion in 2009 due to
financial crisis. The same trend is seen in respect to develop and developing countries

YEAR

WORLD

DEVELOPED DEVELOPING

1990
1995
2000
2008
2009

3395.4
5017.7
6277.2
15763.3
12177.6

COUNTRIES
2496.6
3536.2
4212.4
9044.7
7019.4

COUNTRIES
793.4
1284.0
1919.1
6015.9
4706.7

World Merchandise Export

Trends in global trade during the financial crisis and post crisis
The financial crisis that struck the high income economies in 2008reched low and middle
economies in 2009.World exports of goods and services fell 20 %from $19.6 trillion in
2008 to $ 15.6 trillion in 2009,more in high income economies and some what less in less
and middle income economies .Imports of goods and services by high income economies
fell 22 %from $ 14.0 trillion in 2008 to $ 10.9 trillion in 2009, imports by low and middle
economies fell 19%..World Trade has declines by more than 11% in 2009.
The turnaround in trade took place in mid 2009.The recovery was particularly strong
between mid-2009 and mid-2010when the trade volume increased at an annualized rate
of nearly 20%.World trade recorded its ever increasing in 2010 as merchandise exports
sugared 14.5%.Since then, however world trade growth has lost steam along with the
slowdown in the recovery of world economy.
Both trade and output grew faster in developing countries than in developed ones in
2010. This growth of exports in developed and developing countries can be seen in the
table below
Year
2010(exports)

Developed economies
13%

Developing economies
17%

The difference between the trade of developed and developing economies was even
greater on the import side where developed economies imports rose by 11% compared
with 18% in the rest of the world.
Merchandise Trade
World merchandise trade in real terms
World merchandise exports in volume terms rose 14.5% in 2010.TRhe merchandise
exports of developed economies increased by 12.9%, and combined exports from
developing economies and the common wealth of independent states rose by
16.7%.Imports of developed economies grew by 10.7% in 2010 while the import of

developing economies olus the common wealth of independent states increases by 17.9%
in 2010.
Only in Asia and North America exports grew faster than the world average (15.0 percent
and 23.1 percent, respectively) whereas the average export growth was recorded in
Europe (10.8 percent) the CIS (10.1 percent) the Middle East (9.5%) South and Central
America (6.2%)
On the import side, faster than average growth was observed in South and Central
America (22.7%), the CIS (20.6%), Asia (17.6%) and North America (15.7%)
While slower growth was reported in Europe (9.4 %,) the Middle East (7.5%) and Africa
by 7.1%
Asia rapid real export growth in 2010 was led y China and Japan whose exports to the
rest of the world each rose roughly by 28%.China trade performance was more
impressive when one considers the in the country exports in 2009 was less than half of
Japan

High income countries

Percent
8.1

European Union
Low and Middle income economies
China
India

9.1
14.6
21.9
17.2

World

9.6

Average annual growth of merchandise trade in the world during 1999-2000

World merchandise trade in nominal terms:

In nominal terms World Merchandise exports rose by 22% in 2010, rising from US $ 12.5
trillion in 2009 to us $15.2 trillion in 2010.Nominal merchandise exports of developed
economies rose by 16% in 2010 to US $ 8.2 trillion, up from us $7.0 trillion in 2009.
(In US $ billions)

Rank

Exporter

Value

Share(%) Rank

Importers Value

s
1
China
1578
10.4
1
US
2
US
1278
8.4
2
China
3
Germany 1269
8.3
3
Germany
4
Japan
770
5.1
13
Japan
20
India
216
1.4
13
India
Leading exporters and importers in merchandise trade in 2010

1968
1395
1067
693
323

Share
(%)
12.8
9.1
6.9
4.5
2.1

Trade between high income economies and low and middle income economies
Developing economies are becoming increasingly important in the global trading
system,=.Since the early 1990 trade between high income economies and low middle
economies has grown faster than trade among high income economies.The increased
trade benefits consumers and producers. More than half the world merchandise takes
place between high income countries .But low and middle income economies
participation in the global trade has increased in the last 15 years.The trade among the
low and middle economies accounted for about 9.2% of the world merchandise trade in
20009 compared with 4.5% 1996.The share of trade from low and middle income
economies to high income economies increased from 14.1% to 19.7% in 2009

1996

2009

High income to high income economies

62.4
50.4
High income to low and middle income economies 16.0
18.2
Low and middle income to high income economies 14.1
19.7
Low and middle income to low and middle income 4.5
9.2
unspecified
3.0
2.5
Share of different economies in World Merchandise trade
Low income economies specialize in labor intensive sectors but their share in the
global market of labor intensive products is very small. Lower middle income
economies provided most of the textiles clothing and footwear traded globally in
2009.High income economies accounted for the major of trade in agricultural
products and manufactured goods.

 Rising importance of developing countries in global trade

Developing economies are increasingly becoming important part of global trading system
.Their share world trade rose from 15% in 1990to 30% in 2009.Developing economies
share of world exports has raised from 19% in 2000 to 27% in 2009.It is observed
developing countries are increasingly becoming an important destination for the exports
of developed countries.
Developing countries have been leading the recovery in international trade in 2010 in line
with the stronger expansion of their economies .As a result the developing countries share
in global trade increased from about one third to more than 40 between 2008 and 2010
further trade between high income economies and low and middle income economies has
grown faster than trade between high income economies.
Trade in services
Trade in services makes up to 22 % of world trade in 2010 up from 20% in 2000.In
developing economies the nominal value of trade in services grew 16% year over,
doubling the rate of growth over 1990-2000.It was more than that of high income
economies which grew at 11% a year ago over 2000-09
World trade in services has been severely hit by the financial and economic crisis. It is
presumed to be recovered during 2010. UNCTAD data indicate that the value of
international trade in services fell by 12 percent in 2009.But it was less than the decline
in merchandise trade during the same year. The weaker downturn in services trade during
the crisis was due to a lesser dependence on intermediate outputs as much as lesser
reliance on trade finance of certain service sectors such as communication.
Tourism provides an important source of income to many developing countries.
International tourism declined during 2009 but picked up during 2010.
The leading exporters in world trade in commercial services in 2010 are US, Germany,
UK, China and the leading importers in world trade in services in 2010 are US followed
by Germany, China, and UK.India ranks tenth in exports and 7th in imports

 Trends in trade balances

Trade imbalances of leading economies widened in 2010, as exports and imports bounded
back from their depressed levels in 209.However, for most countries the gap between
exports and imports were smaller after the crisis then before. The trade deficit for the US
in the year 2010 increased 26% compared with 2009.However the 2010 deficit of roughly
US $690 billion was 22% less than the corresponding deficit of US $882 billion in 2008.
Japan was an exception to the trends towards smaller trade deficit after the financial
crisis. In 2008 the country recorded a US $ 19 billion surplus of exports over imports but
this nearly quadruples to US $ 77 billion in 2010.