Global Trade – Prospects And Challenges

In the aftermath of the global financial crisis, world trade growth has witnessed a dramatic slowdown both from a historical perspective and relative to overall GDP growth. Moreover, in 2016 trade recorded its weakest performance since the crisis. Drawing on data released by several international economic organizations, and on insights from current literature on this topic, our paper highlights the main trends that have shaped world trade in 2016, and outlines its short-term prospects.It takes stock of the recent signals suggesting a revival in global growth, and also examines the cyclical and structural factors that are behind the sluggish trade growth. It finds that subdued global investment and surging protectionism, alongside heightened uncertainty arising from the radical change in the new American administration's trade policy orientation and Great Britain's exit from the EU, are weighing heavily on the prospects for global trade growth and the patterns of trade relations among countries.