International trade collapsed during the global financial crisis, and growth in trade has remained relatively weak since then. Total merchandise trade by value dipped in 2009, grew in the following five years, and again decreased in 2015. Since the aftermath of the global financial crisis, the year-on-year annual growth in international trade has been falling (see Figure 1). This trend was exacerbated by the onset of US-China trade tensions in 2019. Following the Covid 19 pandemic, world trade fell abruptly, and global manufacturing export orders fell below the lowest point of the global financial crisis. In real terms, global trade has barely grown in line with global GDP. This is striking, given that trade has consistently outpaced GDP since the mid 1800s, with the exception of the interwar years. In nominal terms, trade appears even weaker, failing to keep up with GDP growth owing to the fall in the relative prices of traded goods and services, particularly commodities. The financial crisis also brought a halt to the rapid rise in standard balance of payments based measures of financial openness.
Growth in trade in goods (yearly % change)
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