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The Global Trade Slowdown: Structural or Cyclical?

This paper focuses on the sluggish growth of world trade in absolute terms and relative to GDP growth. Data suggest that world trade is no longer a growth engine and many factors (the rise of protectionism and the massive introduction of non-tariff measures, China’s new role, low level of investment, the falloff in FDIs, the structure of world trade, the decline in potential growth, the lack of potential to significantly reduce tariffs, etc.) suggest that the “new normal” for the next 15 years may look like the five years that have just passed (with world trade growth lower than the growth of the world economy), and not the last 30 years which preceded this period.”



This is a fraught time for global trade. In many countries, trade is under siege, raising the spectre of protectionism. Alongside the anti-trade rhetoric, there is the notion that we have reached ‘peak trade’ or that globalisation has ground to a halt.

Roberto Azevedo, Director-General, World Trade Organization
World Trade Symposium, organised by the Financial Times and Misys, on the topic ‘Trade and Globalisation in the 21st Century: the Path to Greater Inclusion’, London, June 7, 2016

Even if inequality on a global, cross-country scale has been declining, it is no wonder that perceptions abound that the cards are stacked against the common man – and woman – in favor of elites. These frustrations are leading people to question established institutions and international norms. To some, the answer is to look inward, to somehow unwind these linkages, to close borders and retreat into protectionism. As history has told us – time and again – this would be a tragic course. The answer to the reality of our interconnected world is not fragmentation. It is cooperation.

Christine Lagarde, Managing Director, International Monetary Fund
“Decisive Action to Secure Durable Growth” - Lecture by Christine Lagarde, IMF Managing Director, at an event hosted by Bundesbak and Goethe University,
Frankfurt, Germany, April 5, 2016

ITHURBIDE Philippe , Senior Economic Advisor

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The Global Trade Slowdown: Structural or Cyclical?
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