Trucks carry containers unloaded from ship in Qingdao, China’s Shandong province
The growth of global commerce will pick up speed this year and next, says the World Trade Organization…Trade will grow by a “modest” 4.7% this year and by 5.3% in 2015, says the WTO.
Next year’s figure, if correct, would be in line with the average growth rate in world trade over the last 20 years…These forecasts are consistent with other figures that show the world economy is gradually recovering from the financial crisis…
The overall impact is that global trade is above its pre-crisis level, but well below where it would have been, had it grown in line with the earlier pre-crisis trend…In fact, that gap is still getting wider and by next year will, on the new forecasts, be 19%.
So the analysis by the WTO does suggest progress…But if world trade and its growth before 2008 was in some sense normal, we are still not back there…
“In addition to creating a permanent shift downward in the level of trade,” said the WTO in a press release…”The global recession of 2008-09 may have reduced its average growth rate as well.”
The agency’s director general, Roberto Azevedo, said that just waiting for an automatic increase in trade was not enough…He called for new trade liberalisation agreements, in particular the negotiations known as the Doha Round…”Concluding the Doha Round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment.”
The new WTO figures confirm that China is now the biggest goods trader in the world…Adding together exports and imports, China leads the United States, which is itself still the biggest trader in commercial services…However, the picture is different if the European Union is treated as a single unit, counting the trade of EU member states with outside nations and excluding commerce within the Union.
On that basis, the EU is the world’s biggest trader.
A significant portion of the whole equation is foreign direct investment, one of those economically rich processes that typically provides jobs and trade at both ends of such agreements. As long as Congressional Republicans control regulations governing FDI, the United States doesn’t stand a chance of improving trade.
Tea Party Confederates and the rest of the Republican Party have done everything they can to sabotage foreign direct investment from China in the United States. Between their Cold War mentality and fear-based ideology leftover from the Bush-Cheney years, FDI from China last year was less than 1% of the total.
Logic makes it clear to the Chinese their investment plans are better served within the European Union and in bilateral agreements with developing nations. That is where they are going to send their money. Americans who want jobs had better start asking questions of the isolationist patriots in Congress who believe their only mandate is to protect the likes of General Electric and the Koch Brothers.