WTO Global Trade Outlook and Statistics
Navigating the global trade landscape has become increasingly complex in recent years. With the rise of trade tensions, global prices, and inflation levels, it has been quite a challenge to understand the current state of international trade. Last week, the World Trade Organization (WTO) released its Global Trade Outlook and Statistics for 2023. This publication provides an overview of global trade and its key trends. In this article, VTZ shares with you the most relevant insights from the report.
What is the Global Trade Outlook and Statistics?
WTO’s Global Trade Outlook and Statistics is a report that provides governments, companies, and experts with valuable insights on the state of the global economy. In terms of trade statistics, the WTO compiles and publishes a wide range of data on international trade through its statistics database. The WTO’s trade statistics database has been available online since 2002 and is regularly updated with new data.
The frequency and level of detail of the data have also evolved over time, with the WTO expanding the range of information available to users. In general, this database provides users with access to a wealth of trade-related information. In the Global Trade Outlook and Statistics report, the WTO provides a summary of its database on trade flows, tariffs, and trade agreements. This publication also includes information on the commercial policies, as well as valuable insights on geopolitical, economic, and financial events that affect international trade.
Global Trade Outlook and Statistics: Key Points
In this report, the WTO analyses recent trade developments until the end of 2022 and presents its projections for international trade in 2023 and 2024. In general, the WTO had foreseen that global trade would stagger in 2022. Its main concerns were that the effects of the pandemic and the War in Ukraine would result into supply chain disruptions, as well as high inflation levels.
The war in Ukraine and stubborn inflation around the world are expected to hold back growth in global trade this year, restraining the pace of economic recovery even as the world emerges from the height of the pandemic https://t.co/AkTcEyJV4X— The Wall Street Journal (@WSJ) April 5, 2023
However, the WTO found that trade on goods was remarkably resilient for most of 2022. The global trade volume experienced a significant growth of 4.3% in the first three quarters of the year, and a minor increase of 1.7% in the last quarter. The WTO highlights the following points regarding trade in 2022 and its forecasts for 2023:
Challenges of International Trade in 2022
The WTO Director General, Ngozi Okonjo-Iweala, stated that elevated global commodity prices, monetary policy tightening, and outbreaks of the pandemic disrupted trade in numerous countries. The WTO observed that inflation rates hit record levels in 2022. To tackle them, central banks have found themselves in the difficult position of having to strike a balance between taming inflation, sustaining economic growth, and maintaining financial stability. This situation represented a relevant concern to global trade.
In the Global Trade Outlook and Statistics, the WTO also noted that commodity price fluctuations impacted trade volumes in 2022. Particularly, the instability of energy supply has played a leading role. The most relevant problem was that European countries were unable to import gas from Russia and were forced to resort to other suppliers. This represented a critical issue in global supply chains that Europe has not efficiently tackle. Consequently, the WTO observed that Europe had a smaller trade growth than other regions.
Forecasts for International Trade in 2023
On a more positive note, the WTO foresees that inflation rates will probably decrease in 2023. The stabilization in energy prices and the projected decline in prices of food may contribute to tackling inflation this year.
#LATEST Global #trade volume in 2023 is projected by the #WTO to grow by 1.7%, up from the previous 1% forecast, mainly due to China's relaxation of its COVID-19 restrictions, according to the organization's annual trade statistics and outlook report. pic.twitter.com/6haJ036anS— China Daily (@ChinaDaily) April 5, 2023
Moreover, the WTO projects that trade on goods will have a volume increase of 1.7% in 2023. Although this number is quite small, even smaller than that of 2022, this projection consists of a higher growth than WTO’s projection from last October. In addition, the organization foresees that trade should grow by 3.2% in 2024.
Statistics on Goods and Services Trade
On the one hand, exports and imports of goods rose 12% in 2022 to 25.26 trillion USD. This growth is significantly slower than that of 2021, when trade on goods recorded a 27% increment. The WTO noted that the fastest growing sectors were those related to energy. For instance, fuel trade reported a 61% rise in 2022.
BREAKING: WTO forecasts global trade growth to slow to 1.7% in 2023 while GDP will rise 2.4%. Projections for both trade and GDP growth are below the 12-year averages. More in the new Global Trade Outlook and Statistics report: https://t.co/2I49LS8XYi #GlobalTradeOutlook pic.twitter.com/qshCyBNfLk— WTO (@wto) April 5, 2023
On the other hand, services trade ascended 15% in 2022 to 6.8 trillion USD. Particularly, the WTO observed that trade in transport services performed outstandingly good. This sector increased 25% in 2022. Moreover, the organization considers that freight transport rates have returned to pre-pandemic levels. This fact indicates that exports and imports of goods are returning to normality.
Computer services are a trend!
The last key point of the Global Trade Outlook and Statistics is that trade in computer services is on the rise. Specifically, the organization notes that world exports in computer services were 45% above pre-pandemic levels in 2022.
This growth was boosted mainly by the remote working, online learning, and streaming services that became extremely popular in the pandemic. Consequently, the market for cloud services, machine learning, and artificial intelligence has expanded in recent years.
Global Trade Outlook and Statistics: North America and Mexico
In the Global Trade Outlook and Statistics report, the WTO also explores some of the regional and country-specific trade outlooks from its database. Particularly, the WTO highlighted notable trends or developments in various parts of the world. In the report, the WTO states that:
The WTO foresees that North America will have a 3.3% increase this year, while it expects other regions to have a weaker export performance. However, the organization projects that imports in North America will suffer a 0.1% contraction in 2023. In general terms, this international organization noted that Mexico, Canada, and the United States had quite a satisfactory performance in trade terms during 2022.
How much money does international trade represent for North America?
In the following tabs you can see the global ranking of these three countries in terms of the value of their international trade operations:
2. USA – 2,065 billions of USD
3. Canada – 597 000 millions of USD
13. México – 578 000 millions of USD
1. USA – 3.376 billions of USD
12. Mexico – 626 000 millions of USD
15. Canada – 582 000 millions of USD
1. USA – 897 000 millions of USD
18. Canada – 122 000 millions of USD
1. USA – 658 000 millions of USD
13. Canada – 135 000 millions of USD
30. Mexico – 48 000 millions of USD
Trade in North America is thriving, despite the difficulties that global the economy is dealing with. There are several factors that influence trade in this region, but the most notable is the implementation of the USMCA. The performance of trade in North America in 2022 reflects the institutional framework and proper enforcement of the USMCA. Hopefully, we will continue to see an increase of trade in this region.
Challenges and Opportunities
In summary, the WTO Global Trade Outlook and Statistics for 2023 provides an overview of global trade and its key trends. In the report, the organization noted that numerous factors limited the growth of trade on goods and services in 2022. High inflation rates and disruptions in global supply chains played a key role in this situation. But, fortunately, international trade has been resilient and continues to thrive. Certainly, the report provides relevant insights on global trade in 2022 and promising projections for 2023.