Evaluation Note / Simon Evenett

The past month has seen the publication of four reports that reveal much about the slowdown of export growth and the trade distortions that have the greatest reach. Since restoring economic growth is a key G-20 mandate factors that hold back global exports should be a priority. The G-20 should rein in the most important trade distortions, many of which don’t receive the attention they deserve in official monitoring of protectionism.

Recent reports confirm 2015 export growth slowdown

Trade data comes out with lag—even so the latest readings are worrying. In late May the OECD confirmed sharp falls in Q1 2015 exports from the G-7 nations and from several large emerging nations (the OECD includes here Brazil, China, India, Indonesia, Russia, and South Africa.) On 24 June 2015 the respected CPB World Trade Monitor confirmed falls in both the volume and the average price of world trade. Falling prices are not confined to volatile commodities markets—average prices of imported manufactures have now fallen back to levels last seen in May 2009.

Worse, when measured in US dollars, total exports of the G-7 countries have not yet to recover to pre-crisis peaks. Among the large emerging markets mentioned above, only China manages to export more than before the crisis. All of this diminishes the contribution that exports are making to the recoveries of G-20 economies. The markdowns in forecasted growth for 2015 and 2016 reported in the IMF’s July 2015 World Economic Outlook suggest that G-20 economies cannot afford another pronounced export slowdown.