Advancing the Trade Cure
Policymakers don’t know whether the next major global crisis will be financial, climate-related, or stem from a cyberattack, another pandemic, or something else. But if the past is any guide, we can be certain that trade and international economic cooperation will help us weather whatever comes our way.
GENEVA – The only thing that is certain about the future is uncertainty. And that is true of the future of trade as well.
Despite repeated prior warnings of a possible global pandemic, COVID-19 took the world by surprise. The impact on trade was swift and dramatic. In the second quarter of 2020, when much of the world was under lockdown, the volume of global merchandise trade plunged by 15% year on year – the type of sharp decline rarely seen outside of wartime.
Few would have guessed then that by the first quarter of 2021, less than a year after the pandemic began, trade volumes would surpass pre-pandemic levels and reach new record highs. Governments’ restraint in the use of protectionist trade measures, together with large-scale fiscal and monetary support, helped drive economic recovery. In October 2021, the World Trade Organization raised its forecast for growth in global-merchandise trade in 2021 to 10.8% – up from 8% previously – and to 4.7% in 2022.