Global trade records weak performance in 2016

The year 2016 is coming to an end with a record of weak performance in global trade growth since the global financial crisis; this is according to reports aggregated from the World Bank and the World Trade Organisation (WTO).

According to the World Bank, “In 2016, global trade growth recorded its weakest performance since the global financial crisis. Trade volumes stagnated for most of the year, with weak global investment playing an important role, as capital goods account for about one third of world goods trade. Trade has been a major engine of growth for the global economy and has helped cut global poverty in half since 1990. A trade slowdown, therefore, could have implications for growth, development, and the fight against poverty.”

On its part WTO reported that its latest monitoring report shows WTO members introduced 182 new trade-restrictive measures for the reporting period covering mid-October 2015 to mid-October 2016, or an average of just over 15 measures per month. While this represents a decline compared to the average 20 measures per month introduced during 2015, the number of new trade-restrictive measures being introduced remains worryingly high given continuing global economic uncertainty and the WTO’s downward revision of its trade forecasts.

The WTO is projecting a 1.7% increase in world merchandise trade volume in 2016, down from its earlier forecast of 2.8%. If this revised forecast is realized, this would mark the slowest pace of trade and output growth since the financial crisis of 2009.

The report calls on WTO members to work together to ensure that the benefits of trade are spread more widely and are better understood.

“Trade restrictive measures can have a chilling effect on trade flows, with knock-on effects for economic growth and job creation. In the context of a challenging economic scenario, it is more important than ever that WTO members adopt policies which will support trade and ensure that its benefits reach as many people as possible,” said Roberto Azevêdo, Director-General of WTO.

WTO also notes that of the 2,978 trade-restrictive measures put in place by WTO members since 2008, only 740 had been removed by mid-October 2016. The overall stock of measures has increased by almost 17% compared to the previous annual overview, with the total number of restrictive measures still in place now standing at 2,238.

CALEB OJEWALE