Global merchandise trade continued to bounce back in the first quarter from its collapse earlier in the pandemic, but the pace of recovery has diverged strongly across countries and regions, the World Trade Organization (WTO) reported on Thursday.
The volume of merchandise exports and imports in the quarter rose to new heights in Asia, reverted to pre-pandemic levels in Europe and North America, and lagged in poorer, less industrialized regions such as Africa and the Middle East, the WTO said. The volume of world merchandise trade grew 2.1 percent quarter-on-quarter in the period, which is equivalent to an annual rate of 8.7 percent.
Year-on-year growth picked up to 4.3 percent in the same period. A bigger increase is expected in the second quarter due to the steep decline in the same quarter a year ago, the report noted.
The current pace of recovery is broadly consistent with the WTO’s most recent forecast of March 31, which predicted global merchandise trade growth of 8 percent in 2021 and 4 percent in 2022.
“Inequitable access to COVID-19 vaccines continues to pose the greatest threat to the economic outlook, since a failure to protect all people regardless of income leaves populations vulnerable to further waves of infection,” the WTO said.
Most regions have seen merchandise exports and imports recover to varying degrees since trade bottomed out in the second quarter of last year. The major exception is the Commonwealth of Independent States (CIS), exports of which have continued to decline. In the first quarter of 2021, merchandise export volumes were up a year-on-year 21 percent in Asia and 1.9 percent in Europe. They were down slightly in South and Central America, fell 2.2 percent in North America, and declined 4.6 percent in Africa, 8.4 percent in the Middle East and 13.9 percent in the CIS, a group of 12 countries including Russia, Ukraine and many surrounding nations.
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By comparison, merchandise import volumes were up year-on-year in all regions except Africa and the Middle East.
“Overall, it appears that the trade recovery to date has been strongest in Asia and weakest in regions that export natural resources disproportionately,” the report said.
Merchandise trade in value terms also rebounded strongly in the first quarter, up 14 percent year-on-year, due to a combination of increased quantities and higher prices. The sharp decline and subsequent rebound since the start of 2020 mostly reflects trends in manufactured goods trade, while other product categories made smaller contributions, according to the report.
Prices of primary commodities fell during the first wave of the pandemic, but have since risen steadily, contributing to the upswings in fuels, mining products and agricultural products trade, it noted. In May, prices were up 194 percent year-on-year for fuels, 54 percent for metals, 45 percent for food and 26 percent for agricultural raw materials, according to IMF primary commodity price statistics.
WTO estimates for the first quarter of 2021 show strong year-on-year growth in all main product categories of merchandise trade. Manufactured goods trade was up 16 percent after having fallen 18 percent in the second quarter of 2020 at the height of the pandemic. Trade in agricultural products increased 11 percent in the latest quarter.
Sub-sectors of manufactured goods showed positive year-on-year export growth in the first quarter. Computers, telecommunications equipment, and integrated circuits all recorded robust year-on-year trade growth between 25 percent and 28 percent in the latest quarter. In contrast, personal items such as footwear, handbags and clothing saw more modest increases between 4 percent and 11 percent.
Despite the strong recovery of merchandise trade values in the first quarter of 2021, exports of many economies remain below their pre-pandemic peaks. Exports of the United States only increased 1 percent over this period, while those of the European Union rose 10 percent. Exports from China jumped 31 percent in the period.