Global | Prospects of international trade by 2030

Summary

International trade will slow down by 2030, due to both traditional factors (technology, economic development, trade policies) and new determinants (COVID-19, sustainability).

Key points

• Key points:
• International trade has slowed down, mainly since the 2008 GFC, after having grown sharply in the previous decades on declining trade costs, trade liberalization and China integration into global markets, among other factors.
• International trade is expected to continue exhibiting a downbeat tone over the next decade; the trade-income elasticity will likely remain close to 1, well-below the levels reached before the GFC.
• Economic factors (such as cost differentials) will be less relevant drivers of trade than they have lately been, while geopolitical, regulatory, etc. issues will play a bigger and in general negative role.
• There are positive prospects for high-value services, including financial services, which will partially offset the expected moderation in goods trade, mainly in high-tech, GVC-intensive manufacturing.
• Although prospects for trade are not bright, some factors as a better global governance, higher technological gains and the openness of new markets, could trigger more positive scenarios for international trade.

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