International trade is in trouble after the global financial crisis and, with the new Trump administration, the world faces a protectionist onslaught. As a result, there are three ways that international trade can go from here — one considerably ‘more likely’ than the other two.
Let’s begin with the state of play. Three features stand out: a global trade slowdown, creeping protectionism and the failure of the Trans-Pacific Partnership (TPP).
First, global trade growth — what is dubbed ‘peak trade’ — has slowed down markedly. International trade grew twice as fast as world output in the quarter-century before the global financial crisis (GFC). It slumped during the crisis and then picked up again, but since 2012 it has barely kept pace with world GDP growth. Trade revived along with global economic growth in the first quarter of 2017. But it is too early to tell if this is a new trend or just a blip on the screen.
Razeen Sally is Associate Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore.
This article was first published in the East Asia Forum on 23rd April 2017.