WTO looks back at data of 2017

Trade in commercial services fully recovered in 2017, with 8% growth in 2017

The Global Supply Chain Forum, established by the International Chamber of Last month, the World Trade Organization issued World Trade Statistical Review 2018. This looks at the developments during 2017 in world trade, with detailed analysis of the most recent trends.

In 2017, merchandise trade grew 4.7 per cent in volume terms, its strongest pace in six years. The value of world merchandise export increased 11 per cent, after declines in the previous two years.  

This was mainly driven by a 28 per cent rise in export of fuels and mining products, a nine per cent increase in agricultural products and one of eight per cent in manufactured goods.

The increase in value terms was also partly due to a rise in prices of primary commodities such as food and beverages, agricultural raw products, energy, minerals and non-ferrous metals by an average of 17 per cent. Despite the increases for all major product groups, merchandise export values still remained below the level of 2014.

Except the Middle East, all other regions recorded merchandise trade growth in volume terms during 2017. The European Union continued to be the largest exporter of manufactured goods, at a value of nearly $4.7 trillion (plus nine per cent). 

Its global share was almost 39 per cent. China's export in the segment was about $2.1 trillion (plus eight per cent), a global share of 18 per cent. America followed with nine per cent ($1.13 trn, plus four per cent). The top 10 exporters of manufactured goods represented 84 per cent of the world total.

Developing economies exported 43 per cent of the world total. Vietnam entered the top 10 exporters of office and telecom products, with 26 per cent growth. From a low base, export of iron and steel from India rose by a record 69 per cent, whereas China recorded a mere one per cent growth.

Trade in commercial services fully recovered in 2017, with eight per cent growth in 2017. Africa's recovery was boosted by a record growth of 25 per cent in international tourism receipts.

World transport export bounced back (nine per cent growth) as merchandise trade flows and passenger transport intensified. Intellectual property (IP)-related services, with 10 per cent growth, led the surge of eight per cent in export of other commercial services. America, Britain and Germany were the top three commercial services exporters; America, China and Germany were the top three importers. Developing economies accounted for 30.6 per cent of world services export and 38.1 per cent of import.

Looking forward, the report says increased use of restrictive trade policy measures and the uncertainty these bring to businesses and consumers could produce cycles of retaliation. This would weigh heavily on global trade and output. Faster monetary tightening by central banks could trigger fluctuation in exchange rates and capital flow that could be equally disruptive to trade.

On the other hand, structural reforms and more expansionary fiscal policy might cause economic growth and trade to accelerate in the short run. 

The fact that all regions have been experiencing upswings in trade and output at the same time could also make recovery more self-sustaining and increase the likelihood of positive outcomes.

It is clear India failed to ride on the robust rebound in global trade last year. Mainly due to disruptions caused by demonetisation, hurried and faulty implementation of a Goods and Services Tax regime and a strong rupee.
 

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