TWN Info Service on WTO and Trade Issues (Feb22/20)
23 February 2022
Third World Network

World trade at turning point, as supply pressures ease, says WTO
Published in SUNS #9520 dated 23 February 2022

Geneva, 22 Feb (Kanaga Raja) - The WTO's Goods Trade Barometer's current value of 98.7 is down slightly from the previous reading of 99.5 from last November, indicating a loss of momentum in trade at the start of 2022, the World Trade Organization (WTO) has said.

According to information posted on its website, the WTO said that its index, which provides real-time information on world merchandise trade relative to recent trends, remains below its baseline value of 100 but shows signs of bottoming out as supply chain pressures have partially eased.

The WTO said this suggests that the volume of merchandise trade may turn up soon even if it remains below trend in the short run.

Year-on-year growth in the volume of merchandise trade slowed to 8.1% in the third quarter (Q3) of 2021 due to the combination of a rising baseline in 2020 and a small quarter-on-quarter decline over the second quarter (Q2), it added.

Year-on-year growth in the fourth quarter (Q4) is likely to be lower still once statistics for the period are released, even if trade volume is slightly higher than in Q3, said the WTO.

"Cumulatively, the volume of trade in the first three quarters of 2021 was up 11.9% compared to the first three quarters of 2020."

The WTO said this is above its most recent forecast of 10.8% from last October, but slower year-on-year growth in Q4 should bring the increase for the year more in line with that projection.

The WTO said that most of the barometer's component indices were close to their baseline value of 100, indicating trend growth: export orders (99.9), air freight (101.7), electronic components (98.6), and raw materials (101.6).

These indices also confirm the bottoming out of the slowdown in the respective sectors, the WTO underlined.

While the automotive products (92.0) remained below trend, its latest index value marks a turnaround compared to recent months, which may have been helped by the return to trend of shipments of electronic components, which include semiconductors that have been in short supply, it said.

The WTO said that the container shipping index (97.2) dipped further below trend, as port congestion remained an ongoing problem.

However, the WTO suggested that its slowing rate of decline could presage a turnaround in the near future.

Container throughput of major ports has plateaued at a very high level. Purchasing managers indices show delivery times coming down gradually worldwide, but not fast enough for many producers and consumers, it said.