1. Current Trade Environment
1.1. Global Trade Scenario and Emerging future trends
The global trade scenario over the last three decades can be summarized in the following points:
- Today’s global trading system is being fuelled by the dramatic reduction in global transport and communication costs. Geopolitics is also playing a decisive role in restructuring and reinforcing these global trading patterns.
- The increasing prominence of international supply chains can be seen from the fact that world trade (imports and exports) on average has grown on nearly twice as compared to world production (GDP).
- Growth in merchandise trade has been observed to be mostly due to changes in the intensive margin of trade (i.e. trade in the existing goods categories) rather than in the extensive margin of trade (i.e. trade in new goods) although the latter did make a sizable contribution.
- World merchandise and commercial services trade on average increased by about 7% over the last three decades, reaching a peak of $18 trillion and $4 trillion, respectively, in 2011 proving the larger role of services in value added terms.
- In global trade over the last three decades developing economies have propelled not only their share of world exports from 34% to 47% but their share in world imports as well from 29% to 42%; Asian countries playing a more important role than ever.
- Specialization in exports has been on a declining trend with both developed and developing countries diversifying their exports. Countries still relying on concentration of exports are majorly those rich in natural resources.
- Regionalization of trade has been seen as a growing trend in most developing nations around the globe especially in Asia. This comes as a contrast to the industrialized nations (NA and Europe) who have experienced their intra-regional trade to be declining or stagnating in the last few years.
Please Click here to Read more
