In terms of increasing international trade, 2011 was not a year to be celebrated. The volume of global merchandise trade rose by a paltry five percent in that year, compared to an increase of 13.8 percent in the previous year.
The World Trade Report issued by World Trade Organisation (WTO) cites that global output tapered down to just 2.4 percent in 2011, compared to 3.8 percent in 2010.
In a play by play of the year that was, the report recalls that the earthquake, tsunami and nuclear incident that hit Japan in March significantly knocked down that countrys exports in 2QCY11.
Similar natural calamity in Thailand and political turmoil in North Africa had a comparable impact on exports from these places. "Negative gross domestic product growth in the European Union reduced demand for imported goods in the fourth quarter," it adds.
But stuttering trade is only half the tale for this turn of the calendar. 2011 was particularly menacing for international trade on two counts. First, currency exchange rates gyrated wildly during this period, driven mainly by attitudes and perceptions regarding risk related to sovereign debt particularly in the eurozone.
Secondly, the use non-tariff measures (NTMs) to affect trade flows also impeded trade liberalisation. Since the birth of the General Agreement on Tariffs and Trade (GATT) in 1948, tariffs have been progressively reduced, but attention is progressively shifting to NTMs.
Recent financial crisis, current debates on climate change and heightened concerns about food safety have led to an increased use of NTMs.
The report which highlights annual trends in international trade also pointed out that in 2011; India overtook China, with the worlds fastest growing exports at 16.1 percent compared to Chinas export growth of 9.3 percent. However, the Oriental Giant continued to outpace the world in terms of economic growth as its GDP expanded by 9.2 percent.
The World Trade Report is an annual publication by the WTO that aims to improve understanding of trends in international trade.
Comments
Comments are closed for this article.