São Paulo – The United Nations Conference on Trade and Development (UNCTAD) reported this Thursday (22) that last year the value of international trade of goods and services declined even with an expansion of the global economy. It was the first time this had taken place since 2001, according to the report Key Indicators and Trends in International Trade 2016. Trade volume, however, increased 1.5%.
“In other words, while many exporters had to cope with lower prices, they saw no decline in export volumes,” says the report. For the UN’s agency, there are reasons for concern.
Even with an expansion of global trade, it was lower than the growth experienced by the global economy, a scenario rarely seen in the last few decades. Besides, there was a significant volatility in volumes from one quarter to another and between different countries, that is, there was a global expansion, but with certain nations experiencing declines.
“It is arguable whether the physical growth in international trade can continue in a deflationary economic environment,” says the report. “The concern is that many exporters may not be able to maintain their position in the markets for long when facing reduced financial returns,” it adds.
According to UNCTAD, the decline in revenues of international trade was impacted by drop in the price of commodities and the appreciation of the dollar against other currencies. There was also a change in dynamics of globalization, according to the agency, with a reduction of the interdependency among countries and shortening of value chains.
The UM agency believes many nations are reshoring and consolidating domestically industrial processes, which explains the dislocation between the expansion of the global economy and the performance of international trade.
*Translated by Sérgio Kakitani
