In the past year and a half, world trade has faced numerous challenges. Even ordinary people were able to recognize several times how well businesses are networked now and how delivery of goods works in detail. This sensitive business and shipping balance can quickly get out of hand. The best example of this was a ship that blocked the Suez Canal for a few days. A container ship had turned sideways and unintentionally closed a globally important trade passage. The result of that was long delivery delays that were noticeable in numerous industries.
Growth of World Trade
World trade shrunk by 5.3 per cent in 2020, but it is getting back on track now, and that only shows that world trade is growing faster than expected. The recovery from the economic crisis is progressing rapidly. But the picture, which is pleasing at first glance, has to be viewed differently. Industrial and emerging countries were the most vital for this rapid recovery as, in some of them, merchandise trade growth increased significantly. This development is happening much more slowly in poorer countries though, because they need more time to get back on their feet after a critical situation. However, compared to the situation after the financial crisis in 2008/2009, the recovery is progressing much faster.
But there are still numerous risks, which mainly affect shipping. Supply chains have been disrupted for a significant amount of time, which is easily noticeable now. In Chinese harbours, there are still not enough container ships to transport the goods to Europe and the USA. According to experts, it will be some time before this situation improves. They expect it to see visible progress at the end of 2021 and contrarily to the prognoses of some pessimists, globalization has not been brought to an end.
The most economically powerful countries are the so-called G20 countries. They are responsible for almost 90 per cent of the world’s gross domestic product and they should be able to speed up the recovery of world trade. According to the OECD, imports and exports rose by more than 8 per cent in the first quarter of 2021 and, unsurprisingly, countries like China, India, and South Korea recorded the highest increases. The only exception to this was the United Kingdom.
China increased its exports by 18.9 per cent and imports by 19 per cent. On the other hand, the USA had to be content with a growth rate of 6 per cent. Great Britain was struggling with the consequences of Brexit’s adverse effects during the first quarter of the year, with imports and exports only picking up again from April. Many countries in the EU can also look forward to increasing numbers. Italy, in particular, has bounced back speedily, and its figures are significantly higher than that of other member countries in some areas. Overall, EU exports rose by 7.8 per cent and imports by 6.3 per cent. Merchandise trade within the European Union rose by as much as 16 per cent. The World Trade Organization is therefore expecting a global increase of 8 per cent in 2021.