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COMCEC Trade Outlook 2017
5
Table 1: Trade Volume and GDP, Annual % change
2014
2015
2016
Volume of world merchandise trade
2.7
2.6
1.3
Exports
Developed Economies
2.4
2.7
1.4
Developing Economies
3.0
2.0
1.3
North America
4.2
0.7
0.5
Europe
2.0
3.6
1.4
Asia
4.3
1.1
1.8
Imports
Developed Economies
3.6
4.7
2.0
Developing Economies
1.7
0.5
0.2
North America
4.8
6.7
0.4
Europe
3.2
4.3
3.1
Asia
3.0
2.9
2.0
World output (real GDP at market exchange rates,2005)
Developed Economies
1.7
2.2
1.6
Developing Economies
4.2
3.5
3.5
North America
2.4
2.5
1.6
Europe
1.6
2.2
1.9
Asia
4.0
4.2
4.1
Source: WTO
Among the structural factors the slowing pace of global value chains was found to be an
important determinant of the trade slowdown rather than increasing protection or the changing
composition of trade and GDP
3
.
IMF
4
discusses also in detail structural factors that might have affected the world trade. It points
to a structural shift in the relation between the growth of world GDP and world trade as
observed in the income elasticity of trade (the ratio of trade growth to GDP growth). While the
income elasticity of world trade was 2.0 (i.e. the volume of world merchandise trade has tended
to grow 2 times faster than world output) for the period 1986 to 2000, it declined to 1.3 for the
period 2001 to 2014. This means world trade became less responsive to GDP growth. The
decrease in income elasticity of trade is explained partly by the slowing pace of fragmentation
of production into global value chains. According to WTO
5
income elasticity of world trade fell
below to 1 (0.6) in 2016 for the first time since 2001
6.
This weakening relationship between
global trade and global economic output resulted in lower trade levels in 2016 compared to pre-
crisis years.
3
For a more detailed discussion see Constantinescu, Cristina; Mattoo, Aaditya; Ruta, Michele. 2016.
The Global Trade Slowdown: Cyclical or Structural? 2016. Washington, D.C.: IMF Working Paper.
https://www.imf.org/en/Publications/WP/Issues/2016/12/31/The-Global-Trade-Slowdown-Cyclical-or-Structural-42609
4
IMF WEO 2015 Chapter 1.
5
WTO 2017 press release
6
WTO 2017, World Trade Statistical Review