World trade2018 - Belgian Foreign Trade Agency · The world’s top-five exporters, China, the...

1. OVERVIEW OF RECENT TRADE DEVELOPMENTS

AND SHORT-TERM PROSPECTS 6

2. EVOLUTION OF MERCHANDISE TRADE 8

2.1 Exports 9

2.1.1 Export performance by region 9

2.1.2 Ranking of major commodity exporting countries 11

2.2 Imports 12

2.2.1 Import performance by region 12

2.2.2 Ranking of major commodity importing countries 14

3. EVOLUTION OF TRADE IN SERVICES 16

3.1 Exports 17

3.1.1 Export performance by region 17

3.1.2 Ranking of major services exporting countries 19

3.2 Imports 20

3.2.1 Import performance by region 20

3.2.2 Ranking of major services importing countries 21

4. FUTURE TRADE PROSPECTS 22

CONTACTS 32

SUMMARY

3 WORLD TRADE IN 2018

BELGIUM11th largest exporter and14th largest importer of goods worldwide(Sources: World Trade Organization – WTO; World Bank Group; United Nations Conference on Trade and Development)


2018: GROWTH IN EXPORTS AND IMPORTS SLOWS DOWN DUE TO RISING TRADE TENSIONS


1OVERVIEW OF RECENT

TRADE DEVELOPMENTS AND SHORT-TERM PROSPECTS

OVERVIEW OF RECENT TRADE DEVELOPMENTS

AND SHORT-TERM PROSPECTS

I n 2018, global trade displayed a 3.0% increase in volume terms, while the value of merchan-dise exports and imports was up almost 10% to $19.48 trillion. This rise in value was driven partly by higher oil prices, which increased by roughly 20% between 2017 and 2018. The

global trade performance peaked in 2017, expanding by 5.3% in volume terms, which is above the average growth observed in the last half decade. The subsequent deceleration in 2018 was driven primarily by Europe and Asia due to their large share in world imports (36% and 34%, re-spectively). After recording strong increases in 2017, Asia saw its trade growth moderate in 2018. Meanwhile, Europe’s exports stagnated throughout the year, while imports declined gradually.

Over the course of 2018, there was a significant rise in trade tensions among the world’s largest economies. Moves by the United States to increase import tariffs have sparked retaliations and counter retaliations. Global trade growth has lost momentum, although stimulus measures and direct subsidies have so far offset much of the direct negative impacts on China and in the United States. A prolonged episode of heightened tensions and additional tariffs among the world’s largest economies poses considerable risks to the global trade outlook. The impact on the world economy could potentially be significant: a slowdown in investment, higher consumer prices and a decline in business confidence.

As a result of recent developments, volume growth in global trade is now projected to slow down to 2.6% in 2019, before returning to 2.9% in 2020. The current forecast predicts that global growth will level off in the first half of 2019 and firm up after that. Improved momentum for emerging markets and developing economies is subsequently projected to continue into 2020, primarily reflecting developments in economies currently experiencing macroeconomic distress. However, escalating trade tensions remain a major downside risk to the global outlook. If all tar-iffs currently under consideration were implemented, they would affect about 5% of global trade flows and could dampen growth in the economies involved, leading to negative spillovers. While some countries could benefit from trade diversion in the short run, rising trade protectionism would stifle investment and severely disrupt global value chains.


2EVOLUTION OF

MERCHANDISE TRADE

2.1 EXPORTS

The dollar value of world merchandise exports increased to $19.48 trillion in 2018, as exports grew by 9.8%. Among the main exporting economies, a particularly strong increase was recorded for 2018 in the Russian Federation (+25.6%) as prices for oil and gas firmed up to levels that were more common pre-2014. The world’s top-five exporters, China, the United States of America, Germany, Japan and the Netherlands, all experienced growth rates between 5.8% and 10.8%.

Economies specialize their exports by different groups of products. For many developed and de-veloping economies in Southern and Eastern Asia, manufactured goods represent the most ex-ported product group. Many transition economies and developing economies in Western Asia and North and Central Africa rely mainly on fuels. Food is strongly represented in the exports of some economies in South America and Eastern Africa and ores, metals, precious stones and non-mon-etary gold in the exports of several Southern and Western African and Central Asian economies.

2.1.1. EXPORT PERFORMANCE BY REGION

European exports of goods amounted to $7.11 trillion in 2018, which is 9.3% more than the previous year. Germany, Europe’s largest economy, recorded a 7.8% rise, while the Netherlands were the standout for the second year in a row with a growth rate of 10.8%. The United King-dom, which continues to negotiate to leave the European Union, displayed a 10.1% increase in its exports. The exact state of its future trade relations with the EU is still very much up in the air at this moment. The value of Italy’s exports was up by 7.7%, while France and Belgium recorded growth rates of 8.7% and 8.4% respectively. The EU currently has a tense trade relationship with Washington, with Donald Trump threatening to levy tariffs on car imports and other European products. That’s why both parties started preliminary talks at the beginning of May to come to a new agreement, but the biggest problem facing the fresh trade negotiations is that of food. The U.S. won’t contemplate a deal that doesn’t include agricultural goods, and the EU, keen to protect its own farmers and maintain food standards, refuses to allow a deal that does include them.

North America’s exports were up by 7.9% in value in 2018 and reached $2.56 trillion. Exports from the United States, the largest trading nation on the continent, displayed a 7.6% growth rate, as tangible impacts from tariff hikes and trade tensions materialized towards the end of the year. Consumer confidence also took a hit as a result of the longest federal government shutdown in history. Meanwhile, Canada and Mexico displayed a positive growth rate of 6.9% and 10.1% respectively. On 1 October 2018, the United States, Canada and Mexico formally agreed to the terms for a new trade agreement. Compared to NAFTA, the new agreement increases environ-mental and labour regulations, and incentivizes more domestic production of cars and trucks.

The value of South and Central American exports grew by 8.2% to $635.2 billion as economic recovery in the region has lost some momentum due to slowing external demand and ongoing global policy uncertainty. Sharper than expected slowdown’s in the region’s main trading part-ners – United States, China and the EU – or renewed financial volatility could further weaken the recovery. In several of the region’s economies, ongoing political uncertainty clouds the prospects for investment and growth.


Exports of the transition economies that are members of the Commonwealth of Independent States (CIS) displayed an increase of 23.5% in 2018 and reached $640.2 billion. An important factor underlying the recovery was an increase in commodity prices, especially of oil, which accounts for close to 60% of merchandise exports from the Russian Federation. This country’s exports of goods grew by 25.6% last year to $444.0 billion, after already recording a similar growth rate in 2017. The country’s unrealized potential to increase existing exports of goods lies mainly within its home region and to Asia. Unworked non-industrial diamonds have an unrealized export potential of around $791 million in the home region and of $1.7 billion to Asia. Other products with unrealized potential to these regions, Africa and the Americas include refi ned copper and potassium chloride for use as fertiliser.

Asian exports were up by 8.2% in 2018 and amounted to $6.91 trillion. Goods related to ICT and elec-tronics have been amongst the most dynamic components of trade for many countries in Asia. As the region has evolved into a leading production hub for ICT goods, such as electronic components and communication equipment, the share of these goods in the overall trade of merchandise exports has continued to rise over the years. Chinese exports of goods amounted to $2.49 trillion in 2018, which is 9.9% higher than the previous year even though it has been entangled in a trade war with the United States since mid-2018. This all started when the United States unilaterally imposed tariff s on Chi-nese goods valued at $250 billion after stating that China’s trade practices were unfairly limiting its exports. China subsequently responded by imposing retaliatory tariff s on U.S. goods of a similar value. Meanwhile, Japan and Hong Kong managed to record a rise in exports of 5.8% and 3.4% respectively, while South Korea, the other major exporter in the region, displayed an increase of 5.4%.

Africa’s exports grew by 13.6% in 2018 to $478.6 billion thanks in large part to the higher price for oil, which increased oil exporting countries’ export revenues by 19.8%. Nigeria, the largest economy in Africa, saw its merchandise exports grow by 36.4% to $60.7 billion. When oil prices collapsed after 2014, Nigeria was badly hit, with falling state revenues (as oil accounts for 90% of federal income) and rising trade defi cits. The reversal of the oil price decline has restored growth and improved conditions, with the volatility pointing to the need for economic diversifi cation. Egypt, the third largest economy in Africa, recorded a 7.9% rise in exports. This country was rescued from a crisis because of the benefi ts of increased production and exports of natural gas. Rising oil prices and a devaluation supported increase in non-petroleum exports helped as well.


EXPORTS VALUE 2018

($BN)18/17

% CHANGE

World 19,475 9.8

North America 2,564 7.9

South and Central America and the Caribbean 635 8.2

Europe 7,111 9.3

Commonwealth of Independent States (CIS),including associate and former member States 640 23.5

Africa 478 13.6

Middle East 1,139 21.5

Asia 6,905 8.2

Table 1: Merchandise export growth by region in 2018

2.1.2. RANKING OF MAJOR COMMODITY EXPORTING COUNTRIES

The 5 leading merchandise exporters in 2018 were:

China (USD 2.49 trillion or 12.8% of world exports)

United States (USD 1.66 trillion or 8.5% of world exports)

Germany (USD 1.56 trillion or 8.0% of world exports)

Japan (USD 738 billion or 3.8% of world exports)

Netherlands (USD 723 billion or 3.7% of world exports)

The top 5 of the largest exporting countries remained unchanged in 2018. China was still the leading merchandise exporter with a share of 12.8%, before the United States (8.5%) and Germany (8.0%). Japan and the Netherlands, who represented a share of 3.8% and 3.7% respectively in world exports, rounded out the top fi ve.

In 2018, Belgium’s position on the list of world merchandise exporters remained un-changed when compared to the previous year. It ranked in 11th place with a share of 2.4%, before Mexico (2.3%) but after the United Kingdom (2.5%).


2.2 IMPORTS

The dollar value of world merchandise imports amounted to $19.87 trillion in 2018, an increase of 10.1% compared to the year before. Developing economies in Africa and America import much higher values of manufactured goods from the rest of the world than they export. In America this is offset by a positive balance in trade for food and for ores, metals, precious stones and non-monetary gold. In Africa, however, it caused an overall trade deficit with the other continents. This deficit was the equivalent of one quarter of total exports in 2018 despite positive balances in trade of primary commodities except food.

While import volumes have been growing relatively more than export volumes for developing countries, the opposite has happened in regard to developed countries. The relatively larger in-crease in the volumes of imports can be explained by the increase in consumer demand in devel-oping countries. Growth in import volumes has slowed down substantially up to 2017, especially in regard to developing countries, before picking up again during the last two years.

2.2.1. IMPORT PERFORMANCE BY REGION

Europe’s merchandise imports continued to expand at a steady pace (+9.5%) and amounted to $7.15 trillion. Two-thirds of EU imports are raw materials, intermediary goods and components needed for our companies’ production processes. The Netherlands displayed an above average growth rate of 12.4%, while imports of Belgium and France were up by 10.1% and 8.7% in value respectively. Germany, the largest importer of goods in Europe, achieved an increase of 10.6%. When compared to the other European countries, the United Kingdom recorded a relatively low import growth rate of 4.7%.

Total North American imports in value terms were up by 8.4% to $3.56 trillion. Strong consumer spending in the U.S. was one of the reasons why U.S. imports of goods grew by 8.5% to $2.61 trillion in 2018. The Canadian market reaped the benefits of its first full year operating under the Comprehensive Economic and Trade Agreement (CETA) with the European Union, which caused imports to increase by 6.1%. Meanwhile, Mexican imports of goods recorded their highest growth rate of the last three years in 2018 (+10.3%) and amounted to $476.6 billion.

Imports of South and Central America rose for the second year in a row in 2018 (+11.2%) to $645.4 billion. The increase in imports by this region was driven more by an increase in the vol-ume of imports than by higher commodity prices. Part of the reason for the rebound in South and Central American imports can also be attributed to Brazil (+19.8%), which continued to recover from the worst recession in its history.

In August 2014, in reaction to Western sanctions related to the conflict in Ukraine, Russia intro-duced bans on imports of agri-food products (meat, dairy, fruit, vegetables and fish) from the USA, the EU, Canada, Australia, Norway, Albania, Montenegro, Iceland and Ukraine. Initially, the import ban was imposed for one year, but has been subsequently regularly prolonged (as have the corresponding Western sanctions). There are however still a lot of products and equipment that it can only obtain from Western sources. That is why higher Russian imports (+4.6%), com-


bined with increased imports by Kazakhstan (+9.9%), Belarus (+12.1%) and Ukraine (+15.0%) caused total imports of the Commonwealth of Indepen-dent States to grow by 8.4% in 2018 to $435.0 billion.

Imports of Asia were up by 12.7% in value in 2018 and amounted to $6.76 trillion. China, which accounted for almost a third of total Asian imports, re-corded a rise of 15.8%, while India’s imports surged by 13.9%. In October of last year the Indian government announced that it would raise import tariffs on several electronic items and communication devices in order to reign in imports and bolster a falling rupee. The value of total Japanese imports of goods amounted to $748.7 billion (+11.4%) as imports of energy-related commodities such as liquefied natural gas and kerosene were pushed up by an increase in global oil prices, with crude oil imports surging 24.5%.

Africa’s imports rose by 11.1% in 2018 to $573.9 billion. Apart from a few primary commodities and tropical products, all other products are in net im-port status. This situation is likely to continue over the next decade unless industrialization and intra-regional trade on the continent are intensified. That’s why the African Continental Free Trade Agreement, which only recent-ly went into force, is a step in the right direction. South Africa recorded a 12.4% rise in imports, while Nigeria, which was the largest economy in Africa in 2018, saw the value of its imports rise by 33.9% to $41.9 billion due to the higher price for oil products. Although Nigeria is in the top ten of countries with the largest proven oil reserves, the country still imports about 80% of refined products to meet its current domestic need. The reason for this par-adox is Nigeria’s limited refining capacity. The country has however stated that it plans to revamp its refineries in order to cut back on imports.

IMPORTS VALUE 2018

($BN)18/17

% CHANGE

World 19,866 10.1

North America 3,561 8.4


Europe 7,150 9.5

Commonwealth of Independent States (CIS),including associate and former member States 435 8.4

Africa 573 11.1

Middle East 737 0.9

Asia 6,763 12.7

Table 2: Merchandise import growth by region in 2018


2.2.2. RANKING OF MAJOR COMMODITY IMPORTING COUNTRIES

The 5 leading merchandise importers in 2018 were:

United States (USD 2.61 trillion or 13.2% of world imports)

China (USD 2.14 trillion or 10.8% of world imports)

Germany (USD 1.29 trillion or 6.5% of world imports)

Japan (USD 749 billion or 3.8% of world imports)

United Kingdom (USD 674 billion or 3.4% of world imports)

In 2018, the fi ve largest importers of goods were still the same as the previous year. China remained in second place with 10.8%, behind the United States (13.2%) but ahead of Germany (6.5%). Meanwhile, Japan (3.8%), which had regained fourth place in 2017, increased its lead over the United Kingdom (3.4%).

In 2018, Belgium was the 14th world merchandise importer (2.3% of world imports), which is the same position it occupied a year earlier. Our country ranked behind Canada (2.4%), but preceded Spain (2.0%).


3EVOLUTION OF

TRADE IN SERVICES

3.1 EXPORTS

The dollar value of total exports of services amounted to $5.80 trillion in 2018, recording an annual increase of 7.7%. Most world regions witnessed a strong growth, particularly Africa, Asia and Oceania. Services represented around a quarter of total world trade in goods in 2018.

European economies captured almost half of the global market in 2018. However, since 2005, the continent has lost some 6% of its share, which has mainly been seized by emerging Asian economies. In regions mainly comprised of developed countries, the services sector is dominated by financial and insurance services and by various business and intellectual property services. This is the case in Europe and Northern America. In Asia and Oceania, the aforementioned services represent 31% of total exports of the sector. African and Latin American services exports are dominated by travel, representing 42% and 48% of the total respectively. Although developing countries increased their share of trade in services during the last decade, developed countries remain the main exporters in all sectors except construction. Developing countries are also becoming important suppliers to international markets with regard to goods related services as well as business and IT.

3.1.1. EXPORT PERFORMANCE BY REGION

In 2018, total European exports of services were up by 7.9% and amounted to $2.78 trillion. Germany, Europe’s leading economy, recorded a 7.1% growth rate, while exports of France and the United Kingdom displayed a 4.6% and 6.8% increase respectively. Belgium was still the 13th largest exporter of services worldwide with a share of 2.1%, even though the value of its exports only grew by 2.6%. Both Ireland and the Netherlands displayed above average growth rates of 14.4% and 11.4% respectively.

The United States were responsible for 86.9% of all North-American services exports in 2018. The 3.8% rise in U.S. exports helped total exports of services of the continent to grow by 4.1% to $930.5 billion. Canada and Mexico, the two other major economies in the region, displayed a growth rate of 5.6% and 5.7% respectively.

South and Central American exports increased by 2.1% in 2018 to $158.6 billion. Brazil, the largest economy in the region, recorded a negative growth rate of 1.3% as the country is still feeling the consequences of a long recession that began in 2014. The country’s integration into global trade is also much lower than in other emerging markets as trade barriers shield enterprises from global opportunities and foreign competition. Argentina is also having trouble with reaping the full benefits of international trade. Its exports of services decreased by 3.3% in 2018 as the local economy shrank the most since the global financial crisis. Meanwhile, services exports of Colombia displayed an 11.7% rise.


EXPORTS VALUE

2018 ($BN)18/17

%CHANGE

World 5,798 7.7

North America 930 4.1


Europe 2,780 7.9

Commonwealth of Independent States (CIS),including associate and former member States

117 11.9

Africa 113 11.5

Middle East 224 8.2

Asia 1,473 9.8

Table 3: Services export growth by region in 2018

Total Asian exports of services were up by 9.8% in value in 2018 and reached $1.47 trillion. China (+17.1%) and India (+11.4%) both recorded above average growth rates, while exports of Japan, Singapore and Malaysia increased by 3.1%, 6.6% and 7.0% respectively. South Korean exports of services grew by 10.4% to $98.0 billion, after a lower value for transportation services caused a decrease of 5.5% in 2017.

From 2010 to 2016, Africa’s already low share in world services trade decreased even further. Over the last two years, the trend has been reversed and the continent’s participation in international exports of services has increased to $113.9 billion (+11.5%) in 2018. Travel accounts for the highest share in African services exports. Only in Western Africa various business services have a more prominent role. Over the last three decades Nigeria’s economy has shifted from being a predominantly industry driven economy (40% in 1981) to one dominated by services (around 60% in 2018). However, last year the value of its exports of services was down by 4.3% due to a lower value for sea transport. Exports of South Africa and Egypt, the second and third largest economies in Africa, recorded a growth rate of 1.5% and 26.1% respectively.

Total exports of services that originated from the Commonwealth of Independent States amounted to $117.1 billion in 2018. Transportation services were the largest section with a share of 36.8%, while various business services and travel took the number two and three positions with 36.0% and 21.9% respectively. The Russian Federation was by far the largest exporter of services in the region with a share of 54.5%.


3.1.2. RANKING OF MAJOR SERVICES EXPORTING COUNTRIES

The 5 leading services exporters in 2018 were:

United States (USD 808 billion or 13.9% of world exports)

United Kingdom (USD 381 billion or 6.6% of world exports)

Germany (USD 337 billion or 5.8% of world exports)

France (USD 287 billion or 5.0% of world exports)

China (USD 265 billion or 4.6% of world exports)

In 2018, there were no changes in the top 5 of major exporters of services: the United Kingdom remained in second place with a share of 6.6%, behind the United States (13.9%) but ahead of Germany (5.8%), France (5.0%) and China (4.6%).

In 2018, Belgium remained in 13th place as worldwide exporter of services, before Italy (2.1%) and after Switzerland (2.1%). Its exports reached USD 121 billion (2.1% of total world exports of services).


3.2 IMPORTS

The dollar value of world services imports amounted to $5.51 trillion in 2018. Following the trend of recent years, imports in services have continued to expand at a relatively fast pace – about 7% in 2018. Europe, Asia and Africa recorded above average increases in imports, while the dollar value of North and South and Central American and Middle Eastern services imports remained below the global trend. Services are becoming increasingly traded globally and techno-logical advances have led to the rise of more modern services such as ICT-services and financial and intellectual property services. Advanced economies continue to account for the bulk of de-mand of services traded around the world, even though the emerging economies’ share has been increasing. While services account for around two-thirds of global output and 75% of total em-ployment, they are still only responsible for around one-quarter of global trade. However, declines in the cost of transportation and falling communication costs have encouraged trade in services.

3.2.1. IMPORT PERFORMANCE BY REGION

Europe remained the largest importing continent in the world with $2.35 trillion, which is 8.0% more than the year before. Imports of Germany, Europe’s largest economy, displayed a 6.3% growth rate and reached $363.8 billion. Travel services and transportation services were the two primary sections in its imports with a share of 26.6% and 20.6% respectively. The Netherlands (+10.9%) recorded the largest percentage increase of the main economies, while imports of France and the United Kingdom were up by 3.7% and 10.5% respectively. Belgium, which was still the 12th largest importer of services in the world with a share of 2.3%, recorded a 9.7% rise. Imports of Ireland, which had dropped by 8.5% in 2017 due to a lower value for other business services, rebounded in 2018 and displayed an increase of 8.8%.

The rise in imports of the United States (+3.0%) and to lesser extent Mexico (+0.8%) and Canada (+4.6%) were the main reasons why total North American imports grew by 3.2% in value, from $665.5 billion in 2017 to $686.7 billion last year.

Total Asian imports of services grew by 8.1% in value in 2018 and amounted to $1.66 billion. China, which accounts for almost a third of all imports of services in Asia, recorded an increase of 12.2%. Its imports from the rest of the world were composed for more than half (53.2%) of travel services. Thailand (+18.6%) and India (+13.6%) were the other major economies in Asia that displayed above-average growth rates in imports of services.

The value of South and Central America’s imports of services was up by a modest 2.1% to $182.7 billion, even though Brazil, which has the largest economy in this part of the world, recorded a 0.9% drop in its imports. The general increase in imports came primarily from Colombia, where they displayed a rise of 6.2%.

Africa saw the value of its imports grow by 11.9% to $167.5 billion in 2018. Nigeria, which was the number one importer of services on the continent before Egypt and South Africa, recorded an impressive 69.6% rise. This increase can primarily be attributed to a higher value for travel and technical, trade-related services.


IMPORTS VALUE 2018

($BN)18/17

% CHANGE

World 5,511 7.2

North America 686 3.2


Europe 2,350 8.0


142 6.4

Africa 167 11.9

Middle East 319 6.5

Asia 1,663 8.1

3.2.2. RANKING OF MAJOR SERVICES IMPORTING COUNTRIES

The 5 leading services importers in 2018 were:

United States (USD 536 billion or 9.7% of world imports)

China (USD 521 billion or 9.4% of world imports)

Germany (USD 364 billion or 6.6% of world imports)

France (USD 255 billion or 4.6% of world imports)

Netherlands (USD 230 billion or 4.2% of world imports)

There was only one change among the leading services importers as the Netherlands (4.3%) took the number fi ve position thanks to a rise of 10.9%, pushing out the United Kingdom. Meanwhile, the United States still dominated the ranking in 2018 with a share of 9.7% before China (9.4%), Germany (6.6%) and France (4.6%).

In 2018, Belgium remained in 12th place as worldwide importer of services, after the Republic of Korea (2.3%) and before Italy (2.2%). Its imports reached USD 127 billion (2.3% of total world imports of services).

Table 4: Services import growth by region in 2018


4FUTURE TRADE

PROSPECTS

Global trade growth is expected to lose momentum in 2019 when compared to a year earlier. The weaker growth outlook across most regions is attributable to sev-eral external and domestic factors. On the external front, persistent trade tensions

and higher tariffs will continue to weigh on the trade performance of many developed and developing countries. Rising barriers to trade have not only directly impacted global trade flows, but have also increased uncertainty, affecting business and consumer confidence.

A further escalation of trade disputes among the world’s largest economies poses a signif-icant risk to not only short-term growth, but also to medium-term global prospects. Along-side unresolved trade tensions with China, the United States recently signalled its intention to impose additional tariffs on the European Union, primarily targeted at the aircraft and food industries. This is in addition to the imposition of steel and aluminium tariffs that are already in place. The impact of a spiral of additional tariffs and retaliations would not only dampen growth of these large economies, but also have severe spillover effects on devel-oping economies.

European merchandise exports and imports are expected to expand by 1.8% and 1.0% respectively in 2019. The recent slowdown in global growth and world trade, together with high uncertainty about trade policies, is weighing on growth prospects for 2019 and 2020. As global trade and growth are expected to remain weaker during the next two years, eco-nomic growth in Europe will rely entirely on domestic activity. Downside risks to the outlook remain prominent. The risk of protectionist measures worldwide and the current slowdown in world GDP growth and trade could turn out to be more persistent than expected. In Eu-rope, risks include that of a ‘no-deal’ Brexit and the possibility that temporary disruptions currently weighing on manufacturing could prove more enduring.

Asia is expected to record a rise in exports of 3.7% in 2019, while merchandise imports should register growth of 4.6%. Economic outlooks in Asia have been lowered due to the US-China trade war, which has manifested itself in weakened exports throughout the conti-nent. In China itself, the net contribution of foreign trade (exports minus imports) is expect-ed to remain negative. With the United States having withdrawn from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Japan is keen to further cement freer trading relations with other countries. Having secured a free-trade agreement with the European Union, Japan is now intent on having such an agreement with the United States. Moreover, Japan is concerned that the absence of negotiations on such a deal ex-poses Japan to vulnerability should the United States choose to impose tariffs on imported automobiles and automotive parts.

Estimates point to a rise in North American exports and imports of 2.7% and 3.6% respec-tively for 2019. The United States’ export growth will continue to be constrained by slowing global demand and the dollar’s strength, which is making U.S.-made goods less compet-itive on foreign markets. Significant further import restraints, including raising tariffs to 25% on imports from China, would raise prices and lower GDP growth further. Canadian goods exports are forecast to slow sharply after 2018’s healthy performance with a 3% expansion in both 2019 and 2020. While developed markets remain the key export desti-nation for Canadian goods, the diversification trend continues. In 2019, total goods exports to emerging markets are forecast to grow by 4%, just ahead of the 3% growth rate to de-


veloped markets. But by 2020, emerging market growth will move to the fast lane, as it will more than double that of developed markets. In Mexico, trade is expected to moderate in 2019 because of slowing demand from the United States.

Exports and imports of South and Central America are projected to grow by 0.7% and 2.6% in 2019. Amid slowing external demand, ongoing global uncertainty and country-specifi c factors, the economic recovery in the region has lost momentum. Sharper than expected slowdowns in the region’s main trading partners, more specifi cally the United States, China and the EU, could further weaken the recovery.

In 2018, the African countries moved forward with their willingness for economic integration by brokering the African Continental Free Trade Agreement, which went into force on 30 May 2019 and will enter its operational phase on 7 July. The agreement lays the foundation for a compet-itive continental market to accelerate growth and allow Africa to be more competitive in global trade. Currently, Africa is still very much a patchwork of regulations and tariff s, and trade between countries has suff ered as a result. The objective of the agreement is to create a single continental market for goods and services, with free movement of business people and investments.

The forecasts for Australia and New Zealand, the two largest economies in Oceania, are revised down slightly for 2019. Both are expected to be infl uenced by weaker demand from their major trading partners, particularly China and EU countries.

For the economies of the Commonwealth of Independent States (CIS), external conditions, in-cluding reduced demand from major economies and lower prices for non-oil commodities, will slow down growth prospects for 2019. Exports by the Russian Federation, which displayed a growth rate of 25.6% in 2018, are unlikely to perform as strongly in 2019. With geopolitical ten-sions continuing, further sanctions could undermine local business activity. Among other CIS en-ergy-exporters, Azerbaijan is expected to benefi t from higher natural gas output in 2019. Among the CIS energy-importers, growth forecasts are projected to weaken in Ukraine. The country is confronted with lower steel prices and a potential downscaling of the Russian natural gas transit. Belarus may see higher oil import costs from 2019 onwards, restraining economic activity.


Annual % change 2019P 2020P

Volume of world merchandise trade 2 2.6 3.0

Exports

Developed economies 2.1 2.5

Developing economies 3 3.4 3.7

North America 2.7 3.7

South and Central America and the Caribbean 0.7 1.0

Europe 1.8 2.0

Asia 3.7 4.1

Other regions 4 3.4 3.1

Imports

Developed economies 1.9 1.9

Developing economies 3 3.6 3.9

North America 3.6 2.5

South and Central America and the Caribbean 2.6 5.8

Europe 1.0 2.1

Asia 4.6 3.7

Other regions 4 0.5 1.9

1. Figures for 2019 and 2020 are projections.2. Average of exports and imports.3. Includes the Commonwealth of Independent States (CIS), including associate and former member States.4. Other regions comprise Africa, Commonwealth of Independent States (CIS) and Middle East.Source: WTO and UNCTAD

Table 5: Prospects for merchandise trade volume growth in 2018 and 2019 1


MAP 1: MERCHANDISE EXPORTS AND IMPORTS IN CURRENT US DOLLARS BY REGION, 2018

N AMERICA Exports- up 7.9%- $2.56 trillion- 13.2% of world totalImports- up 8.4%- $3.56 trillion- 17.9% of world total

EUROPE Exports- up 9.3%- $7.11 trillion- 36.5% of world totalImports- up 9.5%- $7.15 trillion- 36.0% of world total

COMMONWEALTH OF INDEPENDENT STATES Exports- up 23.5%- $640.2 billion- 3.3% of world totalImports- up 8.4%- $435.0 billion- 2.2% of world total

ASIA Exports- up 8.2%- $6.91 trillion- 35.5% of world totalImports- up 12.7%- $6.76 trillion- 34.0% of world total

MIDDLE EAST Exports- up 21.5%- $1.14 trillion- 5.9% of world totalImports- up 0.9%- $737.1 billion- 3.7% of world total

AFRICA Exports- up 13.6%- $478.6 billion- 2.5% of world totalImports- up 11.1%- $573.9 billion- 2.9% of world total

S-C AMERICA AND THE CARIBBEAN Exports- up 8.2%- $635.2 billion- 3.3% of world totalImports- up 11.2%- $645.4 billion- 3.2% of world total


MAP 2: EXPORTS AND IMPORTS OF COMMERCIAL SERVICES IN CURRENT US DOLLARS BY REGION, 2018

N AMERICA Exports- up 4.1%- $930.5 billion- 16.0% of world totalImports- up 3.2%- $686.7 billion- 12.5% of world total

EUROPE Exports- up 7.9%- $2.78 trillion- 48.0% of world totalImports- up 8.0%- $2.35 trillion- 42.6% of world total

ASIA Exports- up 9.8%- $1.47 trillion- 25.4% of world totalImports- up 8.1%- $1.66 trillion- 30.2% of world total

S-C AMERICA AND THE CARIBBEAN Exports- up 2.1%- $158.6 billion- 2.7% of world totalImports- up 2.1%- $182.7 billion- 3.3% of world total

COMMONWEALTH OF INDEPENDENT STATES Exports- up 11.9%- $117.1 billion- 2.0% of world totalImports- up 6.4%- $142.0 billion- 2.6% of world total

MIDDLE EAST Exports- up 8.2%- $224.1 billion- 3.9% of world totalImports- up 6.5%- $319.5 billion- 5.8% of world total

AFRICA Exports- up 11.5%- $113.9 billion- 2.0% of world totalImports- up 11.9%- $167.5 billion- 3.0% of world total


WORLD MERCHANDISE TRADE BY REGION AND SELECTED ECONOMIES, 2018 (VALUE) $BN AND %

Exports Imports

Value Annual % change Value Annual % change

20182010-2018 2016 2017 2018 2018

2010-2018 2016 2017 2018

World 19,475 3.0 -3.0 10.6 9.8 19,866 3.1 -3.0 10.8 10.1

North America 2,564 3.4 -3.4 7.3 7.9 3,561 3.6 -2.8 7.3 8.4

United States 1,664 3.4 -3.4 6.6 7.6 2,614 3.6 -2.8 7.0 8.5

Canada 449 1.8 -4.9 7.9 6.9 469 1.8 -3.8 7.0 6.1

Mexico 450 5.7 -1.7 9.5 10.1 476 6.0 -1.9 8.7 10.3

South and Central America and the Caribbean 635 0.8 -5.1 14.0 8.2 645 1.1 -14.1 8.0 11.2

Brazil 239 2.1 -3.1 17.6 10.0 188 -0.2 -19.8 9.9 19.8

Other South and Central America and the Caribbean 395 0.1 -6.2 12.0 7.2 456 1.8 -11.9 7.4 8.0

Europe 7,111 2.9 -0.2 9.4 9.3 7,150 2.3 0.5 10.0 9.5

European Union 6,465 2.7 -0.2 9.9 9.4 6,494 2.2 0.4 10.2 10.4

Germany 1,560 2.7 0.6 8.5 7.8 1,285 2.4 0.4 10.2 10.6

Netherlands 722 2.9 0.0 14.3 10.8 646 2.8 -2.2 14.7 12.4

France 581 1.2 -1.0 6.8 8.7 672 1.1 -0.5 9.0 8.7

United Kingdom 485 1.9 -11.0 7.8 10.1 673 1.5 1.7 1.1 4.7

Italy 546 2.5 1.0 9.9 7.7 500 0.3 -1.0 11.4 10.5

Commonwealth of Independent States (CIS),including associate and former member States 640 1.0 -16.2 24.6 23.5 435 0.5 -3.2 21.5 8.4

Russian Federation a 444 1.2 -17.5 25.5 25.6 249 0.0 -0.8 24.4 4.6

Africa 478 -0.9 -8.3 18.3 13.6 573 2.3 -11.8 5.7 11.1

South Africa 94 0.3 -5.6 16.3 5.9 113 2.0 -12.5 10.6 12.4

Africa less South Africa 384 -1.2 -9.0 18.9 15.7 450 2.4 -11.7 4.5 10.7

Oil exporters b 197 -3.5 -21.5 29.8 24.5 141 -0.2 -21.3 -1.2 10.2

Non oil exporters 187 3.5 3.8 10.4 7.6 318 4.1 -6.1 7.3 11.0

Middle East 1,139 2.9 -8.7 15.3 21.5 737 2.5 -6.5 2.8 0.9

Asia 6,905 4.0 -3.3 10.7 8.2 6,763 4.3 -4.2 14.9 12.7

China 2,487 6.4 -7.7 7.9 9.9 2,135 5.9 -5.5 16.1 15.8

Japan 738 -0.5 3.2 8.3 5.8 748 0.9 -6.2 10.6 11.4

India 325 4.9 -1.2 13.3 8.8 510 5.1 -8.1 24.1 13.9

Newly industrialized economies (4) c 1,922 3.2 -2.3 11.3 6.0 1,819 3.0 -3.5 12.2 9.9

Memorandum

Least developed countries (LDCs) 192 2.9 -0.8 17.0 12.7 273 7.4 -5.3 10.7 10.4

a. Imports are valued f.o.b. (free on board)b. Algeria, Angola, Cameroon, Chad, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, Sudan.c. Hong Kong, China; Republic of Korea; Singapore and Chinese Taipei.Source: WTO Secretariat.


Rank Importers Value Share

Annual %

change

1 United States of America 2,614 13.2 9 2 China 2,136 10.8 16 3 Germany 1,286 6.5 11 4 Japan 749 3.8 11 5 United Kingdom 674 3.4 5 6 France 673 3.4 9 7 Netherlands 646 3.3 12 8 Hong Kong, China 628 3.2 6

- Retained imports1 155 0.8 12

9 Korea, Republic of 535 2.7 1210 India 511 2.6 1411 Italy 501 2.5 1112 Mexico 477 2.4 1013 Canada1 469 2.4 614 Belgium 450 2.3 1015 Spain 388 2.0 10

16 Singapore 371 1.9 13 - Retained imports1 167 0.8 17

17 Chinese Taipei 286 1.4 1018 Switzerland 279 1.4 419 Poland 267 1.3 1420 United Arab Emirates1 253 1.3 -621 Thailand 250 1.3 1322 Russian Federation2 249 1.3 523 Vietnam1 244 1.2 1524 Australia1 236 1.2 325 Turkey 223 1.1 -526 Malaysia 217 1.1 1227 Austria 193 1.0 1028 Brazil1 189 0.9 2029 Indonesia 189 0.9 2030 Czech Republic 184 0.9 13

Total of above 3 16,364 82.4 -World 3 19,867 100.0 10

MERCHANDISE TRADE: LEADING EXPORTERS AND IMPORTERS, 2018 (VALUE) $BN AND %

Rank Exporters Value Share

Annual %

change

1 China 2,487 12.8 10 2 United States of America 1,664 8.5 8 3 Germany 1,561 8.0 8 4 Japan 738 3.8 6 5 Netherlands 723 3.7 11 6 Korea, Republic of 605 3.1 5 7 France 582 3.0 9 8 Hong Kong, China 569 2.9 3

- Domestic exports 13 0.1 -30 - Re-exports 556 2.9 5

9 Italy 547 2.8 810 United Kingdom 486 2.5 1011 Belgium 467 2.4 812 Mexico 451 2.3 1013 Canada 450 2.3 714 Russian Federation 444 2.3 2615 Singapore 413 2.1 11

- Domestic exports 209 1.1 11 - Re-exports 203 1.0 10

16 United Arab Emeritas1 346 1.8 10

17 Spain 345 1.8 818 Chinese Taipei 336 1.7 619 India 326 1.7 920 Switzerland 311 1.6 421 Saudi Arabia, Kingdom of1 299 1.5 3522 Poland 261 1.3 1123 Australia 257 1.3 1124 Thailand 252 1.3 725 Malaysia 247 1.3 1426 Vietnam1 246 1.3 1527 Brazil 240 1.2 1028 Czech Republic 202 1.0 1129 Austria 185 0.9 1030 Indonesia 180 0.9 7

Total of above 3 16,217 83.3 -World 3 19,475 100.0 10

1. Secretariat estimates2. Imports are valued f.o.b.3. Includes significant re-exports or imports for re-export.Source: WTO and UNCTAD.


WORLD SERVICES TRADE BY REGION AND SELECTED ECONOMIES, 2018 (VALUE) $BN AND %

Exports Imports

Value Annual % change Value Annual % change

20182010-2018 2016 2017 2018 2018

2010-2018 2016 2017 2018

World 5,798 5.5 1.6 8.4 7.7 5,511 5.2 1.4 6.6 7.2

North America 930 5.2 1.0 5.5 4.1 686 4.1 3.0 6.9 3.2

United States of America 808 5.4 0.7 5.2 3.8 536 4.7 3.8 6.6 3.0

South and Central America and the Caribbean 158 4.0 0.7 5.4 2.1 182 3.0 -5.7 6.0 2.1

Brazil 33 1.6 -1.4 3.4 -1.3 65 1.5 -10.8 7.9 -0.9

Europe 2,780 5.0 1.9 9.0 7.9 2,350 4.6 2.6 5.6 8.0

European Union 2,469 5.1 2.0 8.6 7.7 2,094 4.3 2.3 4.8 8.0

Germany 337 5.5 4.1 9.8 7.1 363 4.3 4.8 9.1 6.3

United Kingdom 380 4.3 -2.1 3.4 6.8 227 3.1 -2.8 0.3 10.5

France 287 4.3 1.8 5.9 4.6 255 4.6 3.0 2.3 3.7

Netherlands 241 … -3.7 14.8 11.4 229 … -13.9 13.1 10.9

Ireland 206 13.9 12.2 21.1 14.4 218 11.0 25.6 -8.5 8.8


117 4.1 -2.0 13.4 11.9 142 3.1 -11.9 15.0 6.4

Russian Federation 63 3.4 -1.9 14.0 11.9 93 3.1 -16.2 19.6 7.1

Ukraine 15 -1.4 -0.5 14.2 12.2 13 1.4 5.0 12.2 11.9

Africa 113 2.9 -5.5 13.8 11.5 167 2.2 -10.5 9.4 11.9

Egypt 23 … -26.4 39.9 26.1 17 … -2.0 -1.9 8.4

South Africa 15 -0.1 -4.7 10.0 1.5 16 -1.8 -3.8 8.5 2.3

Nigeria 4 7.2 18.3 40.1 -4.3 30 5.9 -39.8 58.6 69.6

Morocco 18 3.1 4.1 13.2 10.3 9 7.7 5.3 20.9 7.5

Middle East 224 13.3 7.1 8.2 8.2 319 7.6 1.4 4.9 6.5

Israel 49 10.8 7.2 13.2 11.5 30 7.1 7.7 12.0 6.2

Saudi Arabia, Kingdom of 17 7.3 20.0 5.3 -1.6 50 0.0 -10.1 8.4 -6.2

Asia 1,473 6.5 1.4 8.6 9.8 1,663 7.5 2.5 7.3 8.1

China 265 5.5 -4.3 8.7 17.1 520 19.0 3.7 3.3 12.2

Japan 187 4.6 7.7 6.4 3.1 198 2.4 4.4 3.5 3.7

Singapore 183 9.1 0.8 10.0 6.6 186 9.4 -2.1 13.6 2.9

India a 205 8.5 3.5 14.5 11.4 174 5.9 8.3 15.9 13.6

Korea, Republic of 98 2.2 -2.6 -5.5 10.4 127 3.6 0.0 12.6 2.0

Hong Kong, China 113 4.6 -5.4 5.4 9.3 81 1.7 0.6 3.8 4.9

Australia 68 3.8 5.7 12.3 6.8 71 2.8 -2.0 9.5 6.3

Memorandum

Least developed countries (LDCs) 39 10.0 -1.8 8.0 13.4 70 3.7 -8.7 5.9 4.2

a. Imports adjusted to f.o.b. valuation… indicates unavailable or non-comparable figuresSource: WTO, UNCTAD and ITC.


Rank Importers Value Share

Annual%

change

1 United States of America 536 9.7 32 China 521 9.4 123 Germany 364 6.6 64 France 255 4.6 45 Netherlands 230 4.2 116 United Kingdom 228 4.1 107 Ireland 219 4.0 98 Japan 198 3.6 49 Singapore 187 3.4 3

10 India1 175 3.2 1411 Korea, Republic of 127 2.3 212 Belgium 127 2.3 1013 Italy 121 2.2 614 Canada 112 2.0 515 Switzerland 103 1.9 016 Russian Federation 94 1.7 717 Spain 88 1.6 1618 Luxembourg 86 1.6 1019 Hong Kong, China 81 1.5 520 Australia 72 1.3 621 United Arab Emirates2 71 1.3 122 Denmark 68 1.2 1023 Sweden 68 1.2 124 Brazil 66 1.2 -125 Austria 62 1.1 1326 Chinese Taipei 57 1.0 627 Thailand 55 1.0 1928 Norway 52 0.9 529 Saudi Arabia, Kingdom of 51 0.9 -630 Malaysia 44 0.8 5

Total of above 4,518 81.8 -World 5,510 100.0 7

SERVICES TRADE: LEADING EXPORTERS AND IMPORTERS, 2018 (VALUE)$BN AND %

Rank Exporters Value Share

Annual%

change

1 United States of America 808 13.9 4 2 United Kingdom 381 6.6 7 3 Germany 337 5.8 7 4 France 287 5.0 5 5 China 265 4.6 17 6 Netherlands 241 4.2 11 7 Ireland 206 3.6 14 8 India 206 3.5 11 9 Japan 187 3.2 310 Singapore 184 3.2 711 Spain 149 2.6 812 Switzerland 122 2.1 113 Belgium 121 2.1 314 Italy 120 2.1 815 Hong Kong, China 114 2.0 916 Luxembourg 113 1.9 1017 Korea, Republic of 98 1.7 1018 Canada 92 1.6 619 Thailand 84 1.4 1120 Austria 75 1.3 1421 Sweden 73 1.3 -122 United Arab Emirates2 71 1.2 223 Denmark 70 1.2 424 Australia 69 1.2 725 Poland 69 1.2 1726 Russian Federation 64 1.1 1227 Chinese Taipei 50 0.9 1228 Israel 50 0.9 1229 Turkey 47 0.8 930 Macao, China3 44 0.8 12

Total of above 4,797 83.0 -World 5,800 100.0 8

1. Imports adjusted to f.o.b. valuation.2. Preliminary annual estimates. Quarterly data not available.3. Follows BPM5 services classifi cation.- indicates non-applicable.

Note: Preliminary estimates based on quarterly statistics. Figures for a number of countries and territories have been estimated by the Secretariat.

Source: WTO, UNCTAD and ITC.


FURTHER INFORMATION

Belgian Foreign Trade AgencyRue Montoyer 31000 Brusselswww.abh-ace.be

STUDIES AND STATISTICS

Christelle CharlierDirectorT +32 2 206 35 [email protected]

Dennis Gijsbrechts Cédric CludtsInternational Trade Analyst International Trade AnalystT +32 2 206 35 73 T +32 2 206 35 [email protected] [email protected]

EDITOR: FABIENNE L’HOOSTCOPYRIGHT: REPRODUCTION OF THIS TEXT IS AUTHORIZED PROVIDED THE SOURCE IS ACKNOWLEDGEDPUBLICATION DATE: JULY 2019PRINTED ON FSC-CERTIFIED PAPERTHIS PUBLICATION IS ALSO AVAILABLE ON THE WEBSITE OF THE BELGIAN FOREIGN TRADE AGENCY:WWW.ABH-ACE.BE


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