The UNCTAD’s ‘Global Trade Update: February 2021’ shows that global trade as a whole dropped by 9% in 2020, with goods trade declining by 6% and services trade by 16.5%.
Signs of recovery in the global goods trade are evident, and appear to be driven largely by East Asian economies.
While South-South trade outperformed global trade in Q4 2020, UNCTAD flags that the positive trade growth of developing countries vanishes if East Asian economies are excluded.
The UN Conference on Trade and Development (UNCTAD) has released an analysis of trade statistics from the fourth quarter (Q4) of 2020, complemented by a short-term forecast for the first quarter (Q1) of 2021. The update observes signs of recovery in the global goods trade in Q4 2020, whereas “trade in services continues to lag.”
Titled, ‘Global Trade Update: February 2021,’ the UNCTAD document shows that global trade as a whole dropped by 9% in 2020, with goods trade declining by 6% and services trade by 16.5%. In the fourth quarter, global trade in goods grew by about 8% on a quarter-over-quarter basis, while trade in services remained at Q3 2020 levels.
The goods trade has been driven largely by East Asian economies, which appear to lead via strong export growth as well as overall gains in global market share. However, UNCTAD projects a slowdown in the goods trade recovery in Q1 2021, forecasting a 1.5% drop compared to Q4 2020. Further, ongoing disruptions to the travel sector will keep services trade depressed, as UNCTAD expects a 7% drop in services trade in Q1 2021 relative to Q4 2020.
UNCTAD shows major trade economies’ import and export trends for both goods and services in the first half of 2020, as well as Q3 and Q4. While imports and exports of both goods and services experienced a universal – and precipitous – decline in the first half of the year, China and a handful of other economies returned to positive quarterly trends.
The update attributes the goods trade recovery in late 2020 in part to developing economies, as South-South trade outperformed global trade. However, UNCTAD flags that “the positive trade growth of developing countries in Q4 2020 vanishes once East Asian economies are excluded.” The update emphasizes that despite the positive outlook, goods trade has not rebounded for most regions.
Analyzing sector-specific recoveries, UNCTAD finds that most have started to recover, with the exception of energy and transport equipment sectors. The strongest sectoral recoveries in Q3 and Q4 have been driven by COVID-19-related goods, UNCTAD notes, including textiles due to increased need for personal protective equipment and office equipment for remote employees working from their homes, among others.
The update also analyzes countries’ export performance and volatility to gauge competitiveness in the wake of COVID-19, but notes that it is still too early to fully assess the implications of the pandemic on countries’ export competitiveness. [Publication: Global Trade Update: February 2021]