Trade May Decline by a Third: WTO

The economic downturn from the COVID-19 pandemic disrupts supply chains and could reduce trade by up to a third. The World Trade Organization predicts a range between 13 and 32 percent, “a wide range because so much about the economic impact of the health crisis was uncertain,” reports Philip Blenkinsop for the World Economic Forum and Reuters. At the height of the 2009 debt crisis, trade dropped by only 12.5 percent. Trade could rebound in 2021, but only if the economic response is managed well and infections do not rebound. Exports from North America and Asia will be hardest hit. Many analytsts compare the current crisis to the Great Depression of the 1930s, but officials warn the banks are not short on capital. “A turn to protectionism would create new shocks,” warns WTO Director-General Roberto Azevedo. Regarding shortages of medical supplies, Azevedo urges diversifying rather than concentrating supplies in home nations. The WTO prediction did not account for services, and restrictions on travel could result in a larger slump. – YaleGlobal

Trade May Decline by a Third: WTO

The COVID-19 pandemic disrupted supply chains and could reduce trade by 13 to 31 percent, compared to the 12.5 percent drop of the 2009 debt crisis
Philip Blenkinsop,
Wednesday, April 15, 2020

Read the article from the World Economic Forum and Reuters about the anticipated drop in global trade.

Top Exporters of Manufactured Goods, US$ Billions, 2018	 EU	$5  China	$2  US	$1  Japan	$1  S Korea	$1  Hong Kong	$1  Mexico	$0
Pain ahead? A decline in world trade will hurt the world's top exporters and could lead to widespread job losses (Source: World Trade Statistical Review 2019)

Trade Balances of Goods an Services as % of GDP, 2017 - shows China, US and much of Europe as neutral;
Economic boost: Trade contributes to GDP growth and jobs in many natons (Source: Key Statistics and Trends in International Trade, UNCTAD)

© 2020 World Economic Forum and Reuters