Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The momentum of the world trade, which rebounded strongly in 2021, slowed down in the second half of the outgoing year and remained subdued in the third quarter. The last quarter is yet to end and it will take a couple of months to get the comprehensive picture of the global trade in 2022. It is, however, clear that a number of factors shocked the global trade in the year. These are: the Russia-Ukraine war, rise in energy prices, and inflation. In this context, the World Trade Organization (WTO) in October last predicted that the volume of global trade would increase on a lower scale by 3.50 per cent in the current year against a 9.70 per cent surge in 2021. The multilateral organisation also predicted that world trade would see further slowdown next year. The provisional rate of projection is 1.0 per cent.
Meantime, the WTO last week released its flagship annual statistical publication. Titled World Trade Statistical Review-2022, it provides a detailed analysis of the latest developments in world trade. The data in this report cover trade in 2021 and also the first half of 2022. This is the 22nd volume of the WTO's annual statistical report which was first published in 2001 as International Trade Statistics. The publication provided an annual compilation of global trade statistics up to 2015. In 2016, the WTO launched the World Trade Statistical Review replacing the International Trade Statistics.
The latest statistical review shows that global merchandise trade posted a 26percent growth in value terms in 2021. Merchandise trade dropped by 5.2 per cent in 2020, the year when the Covid-19 pandemic invaded the world. Trade growth in 2021 was also well above the 2.7percent average rate for 2010-19, the period between the global financial crisis and the onset of the pandemic.
Besides the merchandise trade, global trade in commercial services also registered 16percent growth in 2021 mainly due to 'strong recovery in demand for transport services and the resilience of other services, including financial and business services, fostered by digital technologies.' The WTO report estimated that value of digitally delivered services -- critical for remote work, learning, and entertainment - stood at US$ 3.71 trillion in 2021, around 30 per cent above 2019 levels.
Again, during the first half of 2022, global merchandise trade slowed "as the global economy struggled under the influence of several related factors, including the war in Ukraine, high inflation and lingering effects from the Covid-19 pandemic," according to the WTO flagship report. It estimated that merchandise-trade growth declined to 4.4 per cent, year on year, in the second quarter of 2022 in terms of volume and slower growth is expected in the second half of the year. Nevertheless, both merchandise and commercial services trade grew at double-digit rates in the first half of 2022 when measured in nominal US dollar terms. "These increases were driven by higher food and energy prices as well as increased spending on travel and transport services. Merchandise exports were up 17 per cent, year on year, in value terms in the second quarter while commercial services exports were up 18 per cent in the first quarter," added the report.
The latest statistical review also shows that the Least Developed Countries (LDCs)' share in world goods and services exports remained at 0.93 per cent in 2020 and 2021. Combined exports of goods from LDCs in the last year registered 26.90 percent growth, which was 26.60 per cent in 2020. Exports of commercial services from the LDCs, however, grew by 9.0 per cent in the past year while the growth rate was 17 per cent in 2020. It means, LDCs lag behind in the trade in services.
Against this backdrop, the trade situation in Bangladesh also needs a brief analysis as highlighted in the WTO statistical review which said that 'economies such as Bangladesh and El Salvador that witnessed a boost in exports of other commercial services like computer services jumped up in rankings in 2021.' The good news here is that Bangladesh climbed four places among the leading traders of commercial services to 70th position in 2021 from 74th in 2020. It means the country has made progress in information technology (IT) -oriented commerce and is slowly tapping the global market.
Among the leading 50 exporters and importers in world merchandise trade, Bangladesh ranked 46th in import and 40th in export last year. These top 50 countries, however, included intra-EU trade which means trade in goods between the memberstates of the European Union (EU). In other words, individual trade of the EU countries has been taken into consideration in this ranking. That's why Germany ranked third on the leading importers' list preceded by the United States (US) and China while France ranked sixth.
When intra-EU trade is excluded, meaning individual trade of the EU memberstates not taken into consideration, the rankings of Bangladesh as well as other countries also have changed significantly. Bangladesh became 30th leading merchandise importer and 40th leading merchandise exporter in 2021.
Another interesting finding from the statistical review is that Bangladesh retook the second position in the global clothing export market last year, after it had trailed in third position after Vietnam in 2020. The share of Bangladesh in the global RMG market increased to 6.40 per cent in 2021 from 6.30 per cent in 2020 while Vietnam's dropped to 5.80 per cent in 2021 from 6.40 per cent in 2020.
The WTO trade reckonings also showed that RMG exports from Bangladesh rebounded strongly last year, recording a 24per cent annual growth.
China retained that first position followed by the European Union (EU). So, technically, Bangladesh is the thirdlargest global RMG exporter, and Vietnam is the fourth-largest. If EU's combined export figure were disaggregated country-wise, Bangladesh and Vietnam would be the second and third top exporters.
All these statistical rankings simply indicate a country's comparative status in the global context. It may also be helpful to understand the weaknesses and strengths of the country's international trade structure. The trade statistics of Bangladesh also need to be analysed in this perspective.