Multipolar Global Trade Slowdown and Revival

We conduct a statistical study of the global trade slowdown relative to industrial production after the global financial crisis of 2008–2009 and the revival of the global trade in 2017. We aim to decompose the overall effect by geographical and commodity dimensions, that is, to determine the contribution of regions, major countries and aggregated commodity groups to the global trade slowdown and revival. Calculation scheme implies the two-way analysis, both from the demand and the supply side (imports and exports, respectively), and relies on the customs data. The focus on merchandise trade is confirmed by the fact that the growth rates of world imports and exports in constant prices for services decreased much less after the crisis of 2008–2009 than for goods. We analyze the dynamics of world trade relative to the dynamics of industrial production, not GDP, due to the very high volatility of trade to GDP. The data comes from the Netherlands Bureau for Economic Policy Analysis, WTO, World Bank, OECD, FAO and the Chatham House Resource Trade Database. The key feature of the proposed scheme is aligning data on international trade growth for largest countries from different sources with CPB data for the world as a whole. The results of the study show that the slowdown in global exports was largely associated with emerging economies of Asia (and, primarily, China), Japan, Germany and the US, while the slowdown in global imports reflected the drop in demand in China and other emerging economies of Asia, the Euro Area, Russia and Brazil. The revival of global exports was driven by China,Japan, Netherlands, South Korea and Mexico, and the revival of world imports boils down to the demand growth in China, India and Russia. Unlike the global trade slowdown, the revival of the world trade was critically concentrated in emerging countries, while the Euro Area has practically not experienced the revival. An important role in the global trade slowdown was played by China and its reorientation to the domestic market after the crisis of 2008–2009. In terms of commodity structure of global trade, the slowdown was almost entirely associated with non-resource goods. The results can be used to refine the forecasts of the global merchandise trade growth by accounting for the contribution of the major countries more accurately.