The Unpredictable Future of International Trade

Waltham Trade Policy Review


Over the past decades, emerging markets, free-trade agreements, new producers and consumers along with technological advancements have made international trade not only cheaper but faster, allowing it to grow annually twice as fast as the world economy.

Many people now, however are skeptic about the continuation of this fast-paced growth in international trade. An evidence of this skepticism is the slow average growth of only 2.2% over past two years, which is much less than the 20-year average of 5.3% (as shown in the graph below). Many have attributed this slow growth to sluggish increase in imports and exports in developed countries (0.2% and 1.5% respectively) and moderate import export growth in developing economies (4.4% and 3.3% respectively). Most of us would agree that these poor growth rates were a result of the unhealthy condition of the world economy caused by EU’s lingering recession and high unemployment and Fed’s decision…

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