World trade in 2016 is expected to expand by just 1.7 per cent. The 1.7 per cent growth in world merchandise trade volume will be accompanied by real GDP growth of 2.2 per cent at market exchange rates. This would be the slowest pace of trade and output growth since the 2009 financial crisis.
Trade growth was weaker than expected in the first half of 2016 due to falling import demand and slowing GDP growth in several major developing economies as well as in North America. Certain trade-related indicators have improved, including export orders and container port throughput, but overall momentum in trade remains weak.
The dramatic slowing down of trade growth is particularly serious in the context of the growing anti-globalisation sentiment. Its possible this may translate into misguided policies that could make the situation much worse, not only from the perspective of trade, but also for job creation and economic growth and development which are closely linked to an open trading system.
The way out is to build a more inclusive trading system that goes further to support poorer countries to take part and benefit, as well as entrepreneurs, small companies, and marginalised groups in all economies.