Background

World Trade Organization figures show that the volume of world merchandise trade fell by three percent in the first quarter of the year and is estimated to have dropped by about 18.5 percent during the second quarter. The WTO said in its annual trade forecast issued last April that world merchandise trade could decline anywhere from 13 percent to 32 percent this year, but the multilateral body now states that trade would only have to grow by 2.5 percent per quarter for the remainder of the year to meet its optimistic projection for the entire year. World merchandise trade is projected to expand by 21-24 percent in volume terms next year.

The WTO notes that the ongoing relaxation of strict social distancing measures and restrictions on travel and transport that were in effect in most countries in April and May suggests that trade may have bottomed out in the second quarter. Indeed, global commercial flights, which carry a substantial amount of international cargo, plunged by 74 percent from Jan. 5 to April 18 only to rebound by 58 percent through mid-June. WTO data also show that container port throughput appears to have partially recovered from May to June, while new export orders started to recover in May.

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