Recent trends in World Trade
By Alain Henriot
Delegate Director Coe-Rexecode (Paris)
Kiel, 15th-16th March 2010
• Content
1. Overview of the world economy and the
linkage with world trade
2. Imports and domestic demand
3. Exports and price competitiveness
4. Trade balances
-2
• Financial and raw materials markets have
given an early sign of the rebound at the
beginning of 2009, but show now signs of
hesitation
60000
Domestic Market Capitalization (USD bil ions)
50000
40000
30000
20000
2002
2003
2004
2005
2006
2007
2008
2009
2010
-3
• Raw material and energy prices have also
strongly recovered but signs of hesitation can
be seen recently
Industrial raw materials prices
January 1988=100 (in dollar terms)
220
Brent
U.S. dollars barrel
140
180
100
80
140
60
120
100
40
30
80
60
18
2002
2003
2004
2005
2006
2007
2008
2009
2010
2002
2003
2004
2005
2006
2007
2008
2009
2010
-4
• World economy fell into recession in 2008Q4 and 2009Q1
before registering a positive growth in 2009Q2, which
strengthened in the second half of 2009
8
%
y-o-y, %
quarter-on-quarter, %
6
4
2
0
-2
-4
-6
-8
2002
2003
2004
2005
2006
2007
2008
2009
2010
© Coe-Rexecode
-5
• World industrial production back to previous
trend (but a gap remains in terms of level)
115
2005=100
110
105
100
95
90
85
2002
2003
2004
2005
2006
2007
2008
2009
-6
• World trade picked up briskly in the
second half of 2009
10
y-o-y, %
130
20 5=10
5
CPB
Coe-Rexecode
CPB
Coe-Rexecode
120
0
-5
10
-10
10
-15
90
-20
J
F
M
A
M
J
J
2008
A
S
O
N
D
J
F
M
A
M
J
J
2009
A
S
O
N
D
J
F
J
F
M
A
M
J
J
2008
A
S
O
N
D
J
F
M
A
M
J
J
2009
A
S
O
N
D
J
F
-7
• « Soft » data (here world PMI export order books) gave a
leading signal of the upturn, but were misleading on the exact
timing of the recovery and to some extent on its magnitude
20
y-o-y , %
70
10
58
0
45
World tr ade (volume - LHS)
World export order books PMI (RHS)
-10
33
-20
20
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-8
• The gap between the current level of world
trade and the pre-crisis level remains big
although narrowing …
20
y-o-y, %
140
20 5=10
120
10
100
0
80
60
-10
CPB
Coe-rexecode
CPB
Coe-Rexecode
40
-20
20
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
-9
• … the consequence of an historical drop
in trade flows
World trade: an historical perspective
40
annual percentage change
30
20
10
0
-10
-20
-30
1929
1939
1949
1959
1969
1979
1989
1999
2009
- 10
• Turning points of world trade and industrial
production growth cycles are very similar
Growth cycles of world imports and world
industrial production
0.1 2
Deviation to trend
0.0 8
Worl d i m ports
Worl d i n dustri a l pro ducti o n
0.0 4
0
-0 . 0 4
-0 . 0 8
-0 . 1 2
-0 . 1 6
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
©Coe-Rexecode
- 11
• World trade forecast: a strong rebound
followed by a moderate growth (+7.4% in 2010
after -13.5% in 2009)
140
2 0 5 =1 0
120
2005=100
119,6
103,6
111,4
2008
2009
2010
10
YoY %
-13,4
7,5
QoQ %
2008 Q
2008 Q
2008 Q
2008 Q
2009 Q
2009 Q
2009 Q
2009 Q
2010 Q
2010 Q
2010 Q
2010 Q
80
60
40
1
2
3
4
1
2
3
4
1
2
3
4
123,0
122,1
120,5
112,9
100,4
100,2
103,9
110,0
108,9
110,6
112,2
113,9
-0,8
-1,3
-6,3
-11,1
-0,1
3,7
5,9
-1,0
1,5
1,5
1,5
MoM
30
91
92
93
94
95
96
97
98
9
0
01
02
03
04
05
06
07
08
09
10
September - 09
October - 09
November - 09
December - 09
100,8
103,6
101,8
108,4
2,7
-1,7
6,4
- 12
• First signals of a recovery were observed
in emerging countries but no decoupling
Import levels in volume terms
150
2005=100
140
World
Developed economies
Emerging countries
130
120
110
100
90
80
J
F
M
A
M
J
J
2007
A
S
O
N
D
J
F
M
A
M
J
J
2008
A
S
O
N
D
J
F
M
A
M
J
J
A
S
O
N
D
J
2009
- 13
• China played a leading role, leading other Asian
countries and then Western economies
China: imports by main suppliers
150.0
Bi l i o ns of US dol l a rs (3 month s mov. avg.)
Total
Asia
Apec
Japan
E.U .
Asean
USA
100.0
50.0
10.0
5.0
1.0
0.5
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
- 14
• The situation in other emerging countries remain
heterogeneous regarding imports dynamism, although
all regions came back to a positive trend
Import levels in volume terms
180
2005=100
160
160
140
140
120
NPIA
OPEC
CEEC
120
2005=100
Latin America
Emerging Asia (excl. NPIA )
Africa (excl. OPEC countries)
Mid le East (excl. OPEC countries)
100
100
80
80
60
40
60
2002
2003
2004
2005
2006
2007
2008
2009
2002
2003
2004
2005
2006
2007
2008
2009
- 15
• We can expect only a moderate growth of developed countries
imports in 2010 in volume terms. No further gains of terms of trade
in 2010 (transfers of about 1% of GDP in 2009).
Import levels in volume terms
120
2005=100
130
2005=100
120
100
Germany
Italy
UK
France
110
USA
Japan
European Union (7 countries)
100
90
80
80
70
60
2002
2003
2004
2005
2006
2007
2008
2009
2002
2003
2004
2005
2006
2007
2008
2009
- 16
• Weakness of the Euro: a relief for the Euro area
exporters
Price competitiveness: national export prices/competitors in a common currency
120
2005=100
160
2005=100
140
110
120
100
100
China
South Korea
80
Euro area
Japan
USA
90
60
40
80
2002
2003
2004
2005
2006
2007
2008
2009
2002
2003
2004
2005
2006
2007
2008
2009
- 17
• Main trade imbalances have not disappeared
with the crisis
Current account balance
Billions of US dollars
600
400
200
2008
0
2009
2010
-200
2011
-400
-600
-800
Euro area
Germany
Japan
China
USA
- 18
• Forecast risks
Downside risks

. Would Europe and the U.S. find enough support from their
internal demand to keep the global recovery continuing?
. Overheating in China might trigger a double dip late 2010
. Global imbalances put a threat on the exchange rate system
. As a consequence of trade deficits and high unemployment,
the U.S. and Europe can be attracted by protectionist
measures
- 19
• Forecast risks
Upside risks

. The catching up process (huge output gap) might imply a
quicker and longer economic growth of activity and trade
than expected
. Emerging countries could take the lead of world trade
growth to satisfy internal needs
- 20