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WTO Report Highlights Remarkable Five-Fold Surge in Global Trade Over 28 Years

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WTO Report Highlights Remarkable Five-Fold Surge in Global Trade Over 28 Years

In a significant milestone marking its 30th anniversary, the World Trade Organization (WTO) unveils remarkable findings showcasing a five-fold increase in global trade, soaring to over $30 trillion from 1995 to 2023.

Since its establishment on April 15, 1994, following the Marrakesh Agreement, the WTO’s latest report underscores a substantial surge in total world trade of goods and commercial services, averaging an impressive 5.8 percent year-on-year growth. Notably, trade in commercial services has outpaced goods, boasting an average annual increase of 6.8 percent, while goods trade stood at 5.5 percent.

This surge in global trade has significantly outpaced the growth of the global gross domestic product (GDP), which saw an average annual increase of 4.4 percent over the same period. The report also highlights the rise in the global trade-to-GDP ratio, climbing from 20 percent in 1995 to 31 percent in 2022, before stabilizing at 29 percent in 2023, despite a decline in goods trade values.

Tariffs have notably decreased under the WTO’s umbrella, contributing to a reduction in trade costs and fostering greater international economic cooperation. Moreover, this period of robust trade growth has coincided with a substantial decrease in global poverty, underscoring the pivotal role of trade in supporting economic development and enhancing livelihoods worldwide.

Read also: WTO Forecasts Global Trade Rebound Amidst Challenges and Uncertainties

Director-General of the WTO, Ngozi Okonjo-Iweala, emphasizes the significance of resilient supply chains and a robust multilateral trading framework in driving global trade recovery. Despite temporary setbacks such as the global financial crisis of 2008-2009 and the COVID-19 pandemic in 2020, there remains a steadfast commitment to sustaining economic growth and stability.

As the world continues to navigate geopolitical challenges and trade complexities, the report underscores the importance of nurturing a conducive environment for trade, harnessing the transformative power of commerce to improve welfare and foster global prosperity.

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Global Trade Magazine Calls for Nominations for Annual Women in Logistics Feature

April 12, 2024 – Global Trade Magazine, a premier publication focused on international trade and logistics, is excited to announce the call for nominations for our distinguished annual feature, “Women in Logistics”. This special feature will be highlighted in our upcoming Spring Issue, celebrating the invaluable contributions and achievements of women in the logistics and supply chain sectors.

We are seeking nominations for women who have made significant impacts in the logistics industry, whether they are innovators, leaders, or rising stars. Nominees should exemplify dedication, innovation, and influence in their respective areas and demonstrate a commitment to excellence in logistics.

Eligibility Criteria:

– Nominee must be a woman currently active in the logistics or supply chain industry.

– Demonstrates exceptional leadership, innovation, or contribution to the logistics sector.

Nomination Process:

– Nominations can be submitted by colleagues, peers, or even self-nominations.

How to Nominate:

– Visit our nomination page here: Women In Logistics Nomination Form

– Fill out the nomination form with all required details about the nominee.

Deadline for Nominations:

– All nominations must be received by May 02, 2024.

We look forward to discovering and recognizing the powerful contributions of women in logistics through your nominations. The selected nominees will be featured in the 2024 Spring Issue of Global Trade Magazine, sharing their stories and insights with our global audience.

For more information, please visit www.globaltrademag.com or contact our editor at mcoker@globaltrademag.com.

 

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Kallman Salutes National Export Week, World Trade Month, and the Values that Build Confidence in Global Trade Partnerships

In recognition of the U.S. Commercial Service’s National Export Week and the start of World Trade Month this week, Kallman Worldwide saluted the global trade industry and reiterated the company’s longstanding support for the U.S. Commerce Department’s commitment to strengthening the nation’s economy through exports.

Celebrating its 60th year in the business of advancing global trade, Kallman Worldwide is best known as the leading organizer of U.S. industry at international trade shows. The company earned the President’s “E” Award for trade promotion in 2012 and “E Star” Award in 2022 for its extraordinary efforts to help U.S. exporters connect digitally to international markets when the pandemic shut down live events in 2020.

Perhaps no period over the past 60 years of company history proves the point more than Kallman’s emergence from the pandemic. As the trade show industry rebounded, the company introduced new product and service offerings and leveraged its legacy of corporate social responsibility to forge deeper connections with international trade influencers, thought leaders, and decision makers on behalf of the U.S. export community.

ABOUT KALLMAN WORLDWIDE, INC.

Since 1963, Kallman Worldwide has worked with individuals and organizations in more than 50 nations to advance global trade in STEM-driven industries and supply chains. The company’s portfolio of international trade shows, event management services, custom stand building and design, supply chain networking tools, and workforce advocacy programs connects thousands of buyers and suppliers to more opportunities around the world every year. As an international U.S. representative, Kallman is a strategic partner of the U.S. Department of Commerce and a proud recipient of the President’s “E” and “E Star” Awards for its export promotion efforts and active role in aiding U.S. exporters. The company is headquartered in Waldwick, NJ, with U.S. satellite offices in Washington, DC and Houston, TX, a Latin America office in Santiago, Chile, and a bureau in London, UK.

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The Important Role Air Cargo Plays in the Global Supply Chain

For over a century now, air cargo has played a crucial role in getting time-sensitive and high-value shipments from one point to another as quickly as possible. The world’s first cargo flight was in 1910. Since then, air cargo and private cargo shipping have played a crucial role in transporting time-sensitive and high-value goods internationally and domestically.

Over the years, air transport has also proven to be a key “connector” between the manufacturers and the consumers. In the midst of the COVID-19 pandemic, shipments that took too long to get from one point to another were quickly transported via air.

According to the International Air Transport Association (IATA), air cargo has played a pivotal role in delivering much-needed medical equipment (including repair components and spare parts) and medicines.

Air cargo has also kept the global supply chains functioning for time-sensitive materials. This was carried out by utilizing cargo capacity in passenger aircraft, dedicated cargo freighter operations, and relief flights to affected areas.

IATA added that airfreight had been used to transport a staggering $6 trillion worth of goods annually. This represents at least 35 percent of all global trade by value. However, it is less than 1% of the trade when measured by volume.

The imbalance between value and volume can be attributed to the fact that most of the products that are shipped via air have a high value. Within a given 24-hour period, air cargo providers around the world have:

-Utilized over 100,000 airplanes

-Transported over 20 million parcels

-Shipped a whopping $18.6 billion worth of cargo

Economic Benefits of Air Transport

The air transport industry has a massive and significant impact on other industries and is also considered a growth facilitator. It also affects the global economy’s performance by enhancing the efficiency of other industries across the entire spectrum of economic activity. This is also referred to as “spin-off” or catalytic benefits.

Air transport helps facilitate world trade.

Air transport has allowed countries to participate in the global market by giving them access to primary markets and allowing globalization. Air transport also helps countries to specialize in activities where they have comparative advantage. It also helps facilitate trade with countries that provide other goods and services.

Air transport has been indispensable in the tourism industry.

Air cargo is especially useful for tourism on the island and remote destinations. Tourism directly supports employment in airports and airlines. Spending of tourists and visitors that arrive by air also creates a significant number of jobs in the tourism space.

Air transport boosts global productivity.

Improved air transport links have been pivotal in helping global markets expand. As a result, companies can exploit economies of scale better. This reduces cost dramatically and, as mentioned earlier, allows companies to specialize in areas of comparative advantage.

As more markets open up, air services can introduce companies to more competition and encourage them to become more efficient in the process.

Air transport improves supply chain efficiency.

Countless industries utilize air transport to reduce delivery times as part of the “just-in-time” delivery systems. This will reduce costs and enable companies to deliver products to customers reliably and quickly.

Air transport encourages effective collaboration and networking.

Air transport has been helping promote collaboration and networking among companies from different parts of the world. An excellent transport infrastructure also encourages companies to spend more on development and research.

Final Thought

As the world continues to deal with the unprecedented impact of the COVID-19 pandemic, air transport will continue to play an increasingly vital role in keeping the world’s supply chains running smoothly.

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Melissa Hull is the Content Marketing Strategist for Aviation Charters, a West Trenton, New Jersey-based private aviation company that provides on-demand aircraft charter, aircraft management, and aircraft acquisition services. Aside from her passion for writing, she loves to travel and read espionage books.

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Global Trade After the Pandemic

The staggering impact of the coronavirus pandemic on world trade is still reverberating and will for many months. Businesses are struggling to adjust to the current challenges that travel bans and factory stoppages present to their firms. They are concerned about how to keep their employees safe, informed, and on the payroll in the face of a dramatic economic turndown. But once this pandemic is over, what will its lasting impact be on global trade? How will the trade environment change and how will successful companies respond?

The jury is still out

What the final economic and personal toll of the coronavirus will be to the U.S. and global economy remains to be seen. It may take several months or years to ride out the pandemic and sort out the first stage economic loss that it will leave in its wake. The coronavirus pandemic has already drawn comparisons to the 9/11 attacks and the 1987 and 2008 recessions as far as its overall impact on the U.S. and global economy. It is a uniquely painful moment for international business, especially in regards to the movement of people and products. The recent lock-downs throughout the European Union and the travel ban from Europe to the United States, for example, have no historical precedents. Much like the world looked to regulatory changes in the wake of 9/11 or the financial cascade of problems from 2008, they will again as this initial impact recedes and governments assess how they failed to prepare for this pandemic and how they can help curtail the damage of such occurrences in the future.

Worker safety and transportation screening will be promoted

Unions, companies, and government regulators are already looking at how working conditions will need to change to better protect employees who work in the global trade trenches. From airport workers to longshoremen, workers in many key industries are exposed to cargo and passengers from overseas that potentially could be carrying new diseases across borders. The potential costs of improved detection and phytosanitary procedures will eventually be passed to consumers, but these expenses will be difficult issues to negotiate for industries that have already been hammered by first the U.S.-China trade war and then the dramatic world-wide reduction of traffic flow due to the pandemic.

Much as the terrorist attacks of 9/11 and related incidents gave rise to a host of new security measures at ports and borders, the spread of the pandemic will eventually be the subject of substantial discussion, public hearings, and eventual regulatory changes.  Governments will look for systems that would help them to better screen for potential pathogens at transportation nodes, which may include longer periods of isolation for cargo, and longer lines at the airport for global travelers (not to mention more tax funds to set up these screening and control systems).

Air and cruise industries: only the strong will survive

Passenger airlines and the cruise industry will not likely recover from the economic impact of the pandemic without some substantial government assistance. Even with that financial support, both industries will face substantial challenges to get back to a healthy volume of traffic as the pandemic brought both cruise and air traffic to a standstill. Coming on the heels of ‘flight shaming’ and a wide-spread movement to reduce their carbon emissions, as well as the Boeing crashes and 737 MAX delays, the airlines were already in a delicate position. The pandemic was the knock-out punch.  In the short term, airline CEOs such as British Airway’s Alex Cruz have noted that this is a “crisis of global proportion like no other we have known.” Airlines are projected to lose as much as $113 billion in 2020 alone. Cruises have faced similar challenges, essentially given a ‘death blow’ by the U.S. State Department warning to avoid cruise ships and port lockdowns in the Mediterranean.

What will change as a result?

The economic results of the pandemic have had some additional first-tier effects beyond border safety and damage to the transportation industry. For example, commentators have already noted that the pandemic has forced us into a great virtual working experiment. Insurance companies and their clients will be looking closely into (and likely litigating over) the responsibility for losses as a result of the pandemic. Governments will look to fix the problems we are already seeing in regards to testing and readiness. But what are the secondary effects of the pandemic for businesses? How can companies position themselves to survive and possibly benefit from the changing business landscape that awaits us?

Invest in strategy and security expertise as well as sourcing flexibility

Is this the coronavirus pandemic an isolated incident? Not according to the World Health Organization (WHO), which warns that ‘global catastrophic biological risks’ may be seen on a more regular basis in the coming decades. On top of that natural risk, consider that terrorist organizations have also seen the remarkable disruption caused by the pandemic and may attempt to weaponize biological weapons. It is a risk that governments have known about for some time, but seems even more realistic now that we’ve seen a pandemic in action and the challenges that governments face in attempting to contain it.

This future risk should result in companies spending more time and energy on both corporate strategy and security. The increasingly volatile state of the global markets means that companies will need to beef up their existing forecasting and modeling capabilities. On the risk side, security of employees and far-flung assets will take on a new urgency in the wake of the pandemic. Preparing a company that can flex and adapt in volatile times will mark the difference between companies that thrive and those that go bankrupt. Many companies will also be doing a complex overhaul of their logistics and production concepts.

The US-China trade conflict, and other isolationist tendencies that will linger after this pandemic, will encourage companies to both look closer to home for their production as well as to value the benefit of having alternative sources.  Countries like Canada, Mexico or Latin America will seem more attractive after this experience to U.S. companies. In Europe, sourcing within the EU makes much more sense once the factors of reliability and local access are properly factored into cost comparisons.

The Bottom Line

This pandemic will break firms that cannot handle the financial strain of such a dramatic and abrupt downturn. Government investment and bailouts will allow some to keep their heads above water, but others will simply disappear. Those that do survive will find a different global trade environment: one that demands a greater focus on logistics flexibility and security and the ability to succeed in an international business environment that has new regulatory boundaries which will challenge ‘just in time’ concepts and put a greater value on diverse and more local sourcing. As with all challenges, this situation will also bring opportunities – companies whose products foster virtual communication in businesses and provide equipment that can identify and protect workers from biological agents will see a new surge in interest.  Global world trade will not be killed by this pandemic, but it will have a different and potentially more chaotic nature.

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Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company that offers market research, political risk assessment, and international expansion assistance. Mr. Samson is a former U.S. diplomat and international law advisor who lived and worked in ten different countries.

U.S. Export Volume Expected to Climb in 2015

Baltimore, MD –   U.S. exports are expected to grow by $88 billion or 5 percent, in 2015, despite tepid global GDP growth, according to a research report just released by trade credit insurance provider, Euler Hermes.

According to the company’s latest Economic Insight report, the U.S.’s biggest export gains in 2015 will come from Canada, China and Mexico.

The report also projects strong export increases to smaller countries in Asia, Latin America and the Middle East, “reflecting recent rapid growth in these emerging markets, while also providing the U.S. with more diversification in its export composition.”

Export gains will primarily come from the agrifood, chemicals, energy and mechanical sectors. Textiles and ferrous metals show the smallest increases as the U.S. has become a much smaller player globally within these industries.

As U.S. energy companies are expected to start exporting natural gas globally by the end of 2015, revenues from this sector could be significant, growing from $16 billion in 2012 to $42 billion in 2040 or nearly 1 percent of GDP.

The planned 2016 expansion of the Panama Canal, which may double its capacity, “will also boost U.S. trade by allowing larger ships to carry exports from the U.S. through the canal, significantly reducing costs and making those exports more competitive.”

The U.S.’s largest trade deficit is with China, but several factors could shrink it, especially as China pivots toward a more domestically driven economy, and as the U.S. natural gas boon and favorable labor conditions have reduced China’s competitive wage advantage to the point that a growing number of companies are opting to ‘in-source’ their manufacturing.

In the coming year, the value of the U.S. dollar is expected to rise in 2015 making U.S. exports more expensive and less competitive with export financing faces several challenges, including tight lending conditions and risk-averse bankers.

Rising rates in 2015, the report says, “may make financing more costly and/or harder to obtain, especially given fragile global growth and geopolitical uncertainty.”

In addition, global business insolvencies “are expected to fall 3 percent, a much slower rate than 2014’s decrease of 12 percent.”

At the same time, insolvencies still remain 12 percent above 2007’s pre-crisis levels, meaning that exporters will need to continue stringently evaluating their partners for insolvency risk.

To further promote U.S. exports, two major trade agreements – the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership – are currently being negotiated.

Both agreements  are being structured to reduce the burden of Customs, regulations, tariffs and taxes, lower barriers to trade, and allow increased access to new markets.

“Demand for U.S. exports is, of course, dependent on the strength of the global economy,” said Dan North, senior economist for Euler Hermes Americas.

“While the global economy is set to enter its fourth straight year of lackluster growth, the U.S. economy continues to grow and many of our industrial sectors are showing strength both at home and abroad.”

12/11/2014