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The Future of Global Trade

According to the World Commerce Organization, global trade is poised for a strong but uneven rebound following the pandemic's shock . The International Commerce Organization (WTO) predicts that world trade in merchandise, or products, would increase by 8% in volume in 2021 after decreasing by 5.3 percent in 2020 in its trade statistics and trade projection 2021.

First scenarios, If vaccine manufacturing and distribution speed up, global output – GDP – would increase by roughly 1% in 2021. The amount of global merchandise trade would increase by roughly 2.5 percentage points, with commerce returning to pre-pandemic levels by the last three months of the year. This is the best-case situation.

The worst-case scenario is that vaccine manufacturing falls short of demand. New strains of the virus that are resistant to vaccinations may potentially develop. This may reduce global GDP growth by 1 percentage point in 2021 and reduce trade growth by roughly 2 percentage points.

The value of global commerce in manufactured products increased by 6% in the fourth quarter of 2020 when compared to the same period in 2019. This might be due to industries restarting once COVID-19 safety measures were implemented. Agricultural product trade increased by a similar proportion throughout the same time period. In the fourth quarter, fuels and mining products were still down 19%.

Global travel and transportation services fell 63 percent and 19 percent, respectively, in 2020 compared to 2019, owing to COVID-19-related limitations.

The category of ‘other commercial services,' which includes financial services and computer services, fared better. According to the WTO, this “held up nicely, dropping barely 2%.”

In the second half of 2020, most categories of manufactured products witnessed considerable growth. The global iron and steel trade fell rapidly, from 17 percent to 2 percent during the third and fourth quarters. Textiles increased significantly in both quarters. Electronic products, particularly computers, grew at a constant 12 percent rate in the second half of 2020, fuelled by the shift to remote working.

The World Commerce Organization (WTO) has been tracking indicators that give more frequent data to better understand global trade throughout the epidemic. Three of these are depicted in With COVID-related border restrictions, daily international flights (which commonly carry air freight cargo) decreased by about 80% in the first quarter of 2020. An increase towards the end of 2020 was reversed in 2021 due to the virus's return.

During the epidemic, seaborne shipping has been more consistent. Container ship port calls fell in February and April of 2020, indicating peak seasons of infection.

Daily prices of copper futures contracts dipped dramatically in March 2020, as the epidemic took hold, but have since rebounded — reflecting, once again, the shift to remote working, as copper is a vital element in the manufacture of electrified vehicles.

The seventh graph measures the volume and tone of news reporting about "economic activity." “At the height of the epidemic, press reportage surged, and the average tone of stories was largely negative,” according to the World Trade Organization.
The tone grew more optimistic in November once vaccinations were released, but it has since flattened, possibly due to the pandemic's return