A Little-Noticed Fact About Trade: It’s No Longer Rising

[Oscar]

A Little-Noticed Fact About Trade: It’s No Longer Rising

[ http://www.nytimes.com/2016/10/31/upsho ... -news&_r=1 ]

Binyamin Appelbaum @BCAppelbaum OCT. 30, 2016

The constant flow of goods from Asia to the United States was briefly interrupted last month after Hanjin, the South Korean shipping line, filed for bankruptcy, stranding several dozen of its cargo ships on the high seas. [ http://www.nytimes.com/2016/09/16/busin ... uptcy.html ]

It was a moment that made literal the stagnation of globalization.

The growth of trade among nations is among the most consequential and controversial economic developments of recent decades. Yet despite the noisy debates, which have reached new heights during this presidential campaign, it is a little-noticed fact that trade is no longer rising. The volume of global trade was flat in the first quarter of 2016, then fell by 0.8 percent in the second quarter, according to statisticians in the Netherlands, which happens to keep the best data.

The United States is no exception to the broader trend. The total value of American imports and exports fell by more than $200 billion last year. Through the first nine months of 2016, trade fell by an additional $470 billion. [ https://www.census.gov/foreign-trade/index.html ]

It is the first time since World War II that trade with other nations has declined during a period of economic growth.

Sluggish global economic growth is both a cause and a result of the slowdown. In better times, prosperity increased trade and trade increased prosperity. Now the wheel is turning in the opposite direction. Reduced consumption and investment are dragging on trade, which is slowing growth.

But there are also signs that the slowdown is becoming structural. Developed nations appear to be backing away from globalization.

The World Trade Organization’s most recent round of global trade talks ended in failure last year. The Trans-Pacific Partnership, an attempt to forge a regional agreement among Pacific Rim nations, also is foundering. [ http://www.nytimes.com/interactive/2016 ... rship.html ] It is opposed by both major-party American presidential candidates. Meanwhile, new barriers are rising. Britain is leaving the European Union. The World Trade Organization said in July that its members had put in place more than 2,100 new restrictions on trade since 2008. [ https://www.wto.org/english/news_e/news ... ul16_e.htm ]

“Curbing free trade would be stalling an engine that has brought unprecedented welfare gains around the world over many decades,” Christine Lagarde, managing director of the International Monetary Fund, wrote in a recent call for nations to renew their commitment to trade. [ https://blog-imfdirect.imf.org/2016/09/ ... owth-trap/ ]

Against the tide, the European Union and Canada signed a new trade deal on Sunday. [ http://www.nytimes.com/2016/10/31/busin ... ement.html ]

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