Global Trade Outlook

and Statistics
Update: October 2024
About the WTO

The World Trade Organization is the international body dealing

with the global rules of trade between nations. Its main function
is to ensure that trade flows as smoothly, predictably and freely
as possible, with a level playing field for all its members.
Contents

Executive summary 2

Revised outlook for trade in 2024 and 2025 3

Trade in value terms 15

Merchandise trade 15
Services trade 17

Evidence of decoupling and fragmentation 21

 nalysis: Thirty years of trade-led growth

A
since the Marrakesh Agreement 23

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Executive summary
• The WTO has revised its forecast for world merchandise trade growth
in 2024 to 2.7% – up slightly from the previous estimate of 2.6% – and
to 3.0% in 2025 from 3.3% previously. Demand for traded goods was
weaker than expected in Europe but stronger than foreseen in Asia.

• World real GDP growth at market exchange rates is expected to remain

steady at 2.7% between 2023 and 2025. The fastest growing region in
2024 is likely to be Asia, where output is expected to climb to 4.0%, while
the slowest growing region is likely to be Europe at 1.1%. Germany has
been particularly weak, with GDP growth turning slightly negative in Q2.

• The US dollar value of world merchandise trade was nearly unchanged

in the first half of 2024 compared to a year earlier while services trade
was up 8% in the first quarter. Rising trade volume and flat trade values
implies a decline in export and import prices of around 2.6%. Among
commercial services, the highest growth was achieved by travel, which
rose 19% in Q1.

• Inflation had fallen sufficiently by the middle of 2024 to allow central

banks to cut interest rates. Lower inflation should raise real household
incomes and boost consumer spending, while lower interest rates should
raise investment spending by firms.

• Risks to the forecast are firmly on the downside due to regional

conflicts, geopolitical tensions and policy uncertainty. An escalation of
the conflict in the Middle East could further disrupt shipping and raise
energy prices given the region’s importance in petroleum production.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Gradual trade recovery despite widening

regional conflicts and increased policy
uncertainty

Revised outlook for trade in 2024 and 2025

Global merchandise trade turned upwards in the first half of 2024 with a 2.3% year-on-year increase, which
should be followed by further moderate expansion in the rest of the year and in 2025. The rebound comes
on the heels of a slump in 2023 driven by high inflation and rising interest rates.

WTO economists now anticipate that the volume of world merchandise trade will increase by 2.7% in 2024
and 3.0% in 2025, while global GDP growth at market exchange rates is expected to remain at 2.7% in both
years. Declining inflationary pressure has allowed central banks in advanced economies to begin cutting
interest rates, which should stimulate consumption, boost investment and support a gradual recovery of
global trade. However, significant downside risks remain, including regional conflicts, geopolitical tensions
and policy uncertainty.

The revised trade forecast is consistent with the WTO’s Global Trade Outlook and Statistics report issued in
April, which predicted 2.6% growth in both merchandise trade and GDP in 2024, followed by trade growth
of 3.3% and GDP growth of 2.7% in 2025. These projections are illustrated by Chart 1, which provides the
current trade forecast alongside the previous one. The global figures show only modest revisions since the
last report, but they do not capture some important changes regarding the regional composition of trade.

Chart 1: World merchandise trade volume and GDP growth, 2021-2025

Annual % change

Merchandise trade volume growth Real GDP growth at market exchange rates
10 9.6 10

8 9.0 8
6.2
6 6
6.3
4 3.3 4 3.1
3.0 2.6 2.7 2.6 2.7
3.0 3.1
2 2.7 2 2.7 2.7 2.7
2.2

0 0
-1.1

-2 -1.2 -2
2021 2022 2023 2024 2025 2021 2022 2023 2024 2025

Current estimate April 2024 Current estimate April 2024

Note: Figures for 2024 and 2025 are projections. Trade refers to average of exports and imports.
Source: WTO for merchandise trade volume and consensus estimates for GDP.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Trade developments in value (US dollar) terms show greater variation (see Chart 2). While growth in the
value of world merchandise trade was flat in the first half of 2024 (+0.1%), growth in commercial services
was stronger, up 8% year-on-year in Q1 (the latest period for which data are available). A 2.7% increase in
merchandise trade in volume terms together with flat trade values implies a decline in export and import prices
of around 2.6%. The short-term outlook for services is also more positive than for goods. Comprehensive
services statistics for the second quarter will be released later in October, but available data through June
suggest that relatively strong growth is likely to be sustained in Q2 as well.

Quarterly merchandise trade volume developments are highlighted in Chart 3. Trade increased by 1.1% in
the first quarter of 2024 compared to the previous quarter, which is equivalent to an annualized rate of 4.5%.
In the second quarter, growth slowed to 0.6%, or 2.3% on an annualized basis. For the year-to-date (January
to June), trade was up 2.3% compared to the same period in 2023. This is less than the 2.7% forecast for
the whole of 2024, but stronger year-on-year growth is expected in the second half of the year due to the
weakness of trade in 2023.

Developments in Q1 and Q2 fall close to the lower end of the range of –likely outcomes set out in the WTO’s
April trade forecast, indicated by the dotted lines in Chart 3. The main reason for the lower-than-expected
trajectory of merchandise trade was a substantial downward revision to the European Union’s quarterly trade
volume data back to 2020. The April version of this chart plateaued at 119.1 in 2023, whereas the current
one shows an average of 115.9 for the same year. Despite the downward revision, trade volume in the first
half of 2024 was still 7% higher than in 2019, and 18% higher than in 2015.

Chart 2: Merchandise and commercial services trade growth in value terms, 2022Q1-2024Q2
Year-on-year % change in US$ values

25

21 20
20
17 18

15 14
13

10 9 9 9
8 8 Estimate

5
5
1 2

-2 -2
-3
-5

-7 -8
-10

2022Q1 2022Q2 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2

Merchandise Commercial services

Source: WTO-UNCTAD.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 3: Volume of world merchandise trade, 2015Q1-2026Q4

Seasonally-adjusted volume index, 2015=100

150

140

130

120

110

100

90

80
2015Q1

2015Q3

2016Q1

2016Q3

2017Q1

2017Q3

2018Q1

2018Q3

2019Q1

2019Q3

2020Q1

2020Q3

2021Q1

2021Q3

2022Q1

2022Q3

2023Q1

2023Q3

2024Q1

2024Q3

2025Q1

2025Q3

2026Q1

2026Q3
Note: The shaded region represents both random variation and subjective assessment of risk. The dotted lines represent the
confidence interval of the April 2023 trade forecast.
Sources: WTO and UNCTAD for historical data, WTO Secretariat estimates for forecasts.

Macroeconomic conditions

The global economy continues to improve gradually, although notable differences in economic performance
persist across economies and regions. The ability of policymakers to engineer a “soft landing” will largely
depend on the timing and scope of interest rate cuts.

In recent months, major economies including the United States, the European Union and South Africa have
started to cut interest rates as inflationary pressures have eased (see Chart 4). In contrast, China has
introduced a range of significant stimulus measures to counter weak domestic demand. These include interest
rate cuts, reductions in bank reserve requirements and steps to lower the costs of existing mortgages.

In early August, disappointing US payroll data prompted the Federal Reserve to initiate monetary easing with
a 50 basis point – or 0.5% - interest rate cut in September. The European Central Bank (ECB) had already
lowered its main policy rate by 25 basis points – or 0.25% - in June, but ongoing economic weakness
prompted an additional 25 basis point cut in September. Japan and Brazil stand out as exceptions to this
trend, with both raising interest rates due to persistent inflationary pressures.

In terms of economic performance, the United States saw quarterly annualized GDP growth rise to 3.0%
in Q2, up from 1.4% in Q1. In the eurozone, growth picked up slightly to 1.3% in Q2 from 1.1% in the
previous quarter. Japan’s economy rebounded with 3.1% growth in Q2 following a 2.3% contraction in Q1.
Meanwhile, China’s growth slowed to 2.8% in Q2 from 6.1% in Q1, but year-on-year growth was still 4.7%.

The most conspicuous weak points in the global economy are currently Germany, where output contracted at
an annualized rate of -0.3% in Q2, and Argentina, where output on an annualized basis fell 8.4% in Q1, and
4.8% in Q2. In Germany, the Hamburg Commercial Bank/S&P Global Manufacturing Purchasing Managers’
Index (PMI) – an indicator of future trends in manufacturing - fell to a 12-month low in September, highlighting
the challenges facing the country’s manufacturing sector and hinting at a possible recession. PMIs in other
countries (including the United States) have also signalled weakness in manufacturing, whereas service
sectors appear to be holding up better.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 4: Consumer price inflation in selected economies, January 2021-September 2024

Year-on-year % change and % per annum

United States Euro Area

12.0 6.0 12.0 6.0

10.0 5.0 10.0 5.0

8.0 4.0 8.0 4.0

6.0 3.0 6.0 3.0

4.0 2.0 4.0 2.0

2.0 1.0 2.0 1.0

0.0 0.0 0.0 0.0

O 1
O 1

Ja 1

O 2
Ja 1

Ja 2

Ja 3

4
O 2
Ja 2

Ja 3

Ap 1
Ap 1

Ap 3

O 3
Ap 3

O 3

Ju 1
Ju 1

Ju 2

Ju 3

Ju 4
Ju 2

Ju 3

Ju 4

Ap 2

Ap 4
Ap 2

Ap 4

l-2
l-2

-2

l-2
-2

-2

-2

l-2
l-2

-2

-2

l-2

2
2

l-2
2

l-2

r-2
r-2

r-2

r-2

r-2
r-2

r-2

r-2

2
2

n-
n-

n-
n-

n-

n-
n-

n-

ct
ct

ct

ct
ct

ct

Ja
Ja

Japan China

6.0 3.0 3.0 6.0

5.0 2.5 2.5 5.5

4.0 2.0 2.0 5.0

3.0 1.5 1.5 4.5

2.0 1.0 1.0 4.0

1.0 0.5 0.5 3.5

0.0 0.0 0.0 3.0

-1.0 -0.5 -0.5 2.5

-2.0 -1.0 -1.0 2.0

O 1
Ja 1

O 2
Ja 2

Ja 3

4
Ap 1

Ap 3

O 3
Ju 1

Ju 2

Ju 3

Ju 4
Ap 2

Ap 4
O 1
Ja 1

O 2
Ja 2

Ja 3

4
Ap 1

Ap 3

O 3
Ju 1

Ju 2

Ju 3

Ju 4
Ap 2

Ap 4

l-2

-2

l-2

-2

-2

l-2
2

l-2
r-2

r-2

r-2

r-2
2

2
l-2

-2

l-2

-2

-2

l-2
2

l-2
r-2

r-2

r-2

r-2
2

n-

n-
n-

n-
n-

n-
n-

n-

ct

ct

ct
ct

ct

ct

Ja
Ja

Brazil South Africa

16.0 16.0 10.0 10.0

14.0 14.0
8.0 8.0
12.0 12.0

10.0 10.0 6.0 6.0

8.0 8.0

6.0 6.0 4.0 4.0

4.0 4.0
2.0 2.0
2.0 2.0

0.0 0.0 0.0 0.0

O 1
Ja 1

O 2
Ja 2

Ja 3

4
Ap 1

Ap 3

O 3
O 1

Ju 1

Ju 2

Ju 3

Ju 4
Ja 1

O 2
Ja 2

Ja 3

4
Ap 1

Ap 3

O 3

Ap 2

Ap 4
Ju 1

Ju 2

Ju 3

Ju 4
Ap 2

Ap 4

l-2

-2

l-2

-2

-2

l-2
2

l-2
l-2

r-2

r-2

r-2

r-2
-2

l-2

-2

-2

l-2
2

l-2

2
r-2

r-2

r-2

r-2
2

n-

n-
n-

n-

n-

n-
n-

n-

ct

ct

ct
ct

ct

ct

Ja
Ja

CPI all items (left) CPI non-food, non-energy (left) Policy interest rate (right)

Source: OECD, National Bureau of Statistics China.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 5: Global primary commodity prices, January 2019-August 2024

Index 2019=100 and US$ per million Btu

400 80

350 70

300 60
Index, 2019=100

US$/MMBtu
250 50

200 40

150 30

100 20

50 10

0 0
Nov-21

Nov-21
Sep-21

Sep-21
Jan-21
May-21

Jan-21
Jul-21

May-21
Jul-21
Mar-21

Mar-21
Sep-23

Sep-23
Nov-22

Nov-23

Nov-22

Nov-23
May-22

Jan-23
May-23
Jul-23

Jan-24

May-22

Jan-23
May-23
Jul-23

Jan-24
Jan-22

Jul-22
Sep-22

Jan-22

Jul-22
Sep-22
Nov-19

Nov-19
Nov-20

Mar-23

Nov-20

Mar-23
Mar-22

Sep-24

May-19
Sep-19

Mar-22

Sep-24
May-19
Sep-19
Jul-19

May-20
Jul-20

Mar-24

Jul-19

May-20
Jul-20

Mar-24
Jan-19

Jan-20

May-24
Jul-24

Jan-19

May-24
Jul-24
Mar-19

Sep-20

Mar-19

Jan-20

Sep-20
Mar-20

Mar-20
Energy Crude oil Food Natural gas, Natural gas, Natural gas,
Grains Fertilizers US Europe Japan

Source: World Bank.

Energy prices have fallen from their peak in 2022 as economies have adapted to changing supply conditions
after the outbreak of the war in Ukraine. In the United States, the average price of natural gas has returned to
levels last seen before the COVID-19 pandemic and the war in Ukraine. However, prices in Europe and Japan
remain significantly higher than in the United States. Notably, European natural gas prices are getting closer
to Japanese Liquified Natural Gas (LNG) prices as Europe shifts its gas supplies from Russia to US LNG.
Although European gas prices have dropped from their peak of US$ 70/MMBtu following the outbreak of
war in Ukraine, they still average nearly US$ 10/MMBtu - more than double their 2019 average (see Chart 5).

The trade forecast in depth

Table 1 summarizes the WTO’s projections for merchandise trade volume growth and real GDP growth at
market exchange rates through 2025. If current assumptions hold, world trade will increase by 2.7% in 2024,
slightly above the Organization’s previous forecast of 2.6% from last April.

Asia’s exports will grow faster than those of any other region this year, rising by as much as 7.4%. It will be
followed by the Middle East (4.7%), South America1 (4.6%), the CIS region2 (4.5%), Africa (2.5%), North
America (2.1%) and Europe (-1.4%). On the import side, the fastest growing region will be the Middle East
(9.0%) followed by South America (5.6%), Asia (4.3%), North America (3.3%), the CIS region (1.1%), Africa
(1.0%) and Europe (-2.3%).

The current forecast is premised on world market-weighted GDP growth of 2.7% in 2024 (up slightly from the
2.6% forecast in April). Economic growth will be fastest in Asia (4.0%), followed by the CIS region (3.8%),
Africa (3.3%), North America (2.4%), the Middle East (1.9%), South America (1.8%) and Europe (1.1%).

In 2025, world GDP growth is expected to remain unchanged at 2.7% while world trade growth is expected
to pick up slightly to 3.0%, due in part to the delayed positive contribution of the EU to global trade. Asia
is forecast to lead other regions in export growth (4.7%) and import growth (5.1%). All regions should see
trade flows increase in 2025 in volume terms except for a small decline in South American exports (-0.1%)
and a larger decline in Middle East imports (-1.1%).

1 Refers to South and Central American and the Caribbean.

2 Refers to Commonwealth of Independent States (CIS), including certain associate and former member states.

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Table 1: Merchandise trade volume and GDP growth, 2020-2025 a

Annual % change

2020 2021 2022 2023 2024 2025

World merchandise trade volume b

-5.3 9.0 2.2 -1.1 2.7 3.0

Exports

North America -9.2 6.4 3.9 3.7 2.1 2.9

South America c
-5.0 6.7 3.0 2.3 4.6 -0.1

Europe -8.5 6.9 1.8 -2.6 -1.4 1.8

CIS d -1.1 -0.8 -1.9 -4.5 4.5 1.7

Africa -7.2 3.8 -2.5 4.3 2.5 2.2

Middle East -6.4 -1.6 3.8 1.1 4.7 1.0

Asia 0.6 13.1 0.2 0.3 7.4 4.7

Imports

North America -5.2 11.9 5.7 -2.0 3.3 2.0

South America c -9.9 24.9 4.1 -4.5 5.6 1.7

Europe -8.2 7.5 4.4 -5.0 -2.3 2.2

CIS d -5.2 9.4 -5.7 17.9 1.1 1.7

Africa -13.9 5.8 6.5 0.1 1.0 1.1

Middle East -8.7 12.9 10.5 8.5 9.0 -1.1

Asia -1.0 10.3 -1.0 -0.7 4.3 5.1

World GDP at market exchange rates -2.9 6.3 3.1 2.7 2.7 2.7

North America -2.8 5.7 2.1 2.4 2.4 1.6

South America c -6.3 7.7 4.1 1.8 1.8 2.9

Europe -5.8 6.6 3.5 0.7 1.1 1.6

CIS d
-2.4 5.7 0.1 3.9 3.8 1.9

Africa -2.4 4.7 3.8 3.1 3.3 3.9

Middle East -3.5 4.4 6.1 1.4 1.9 3.7

Asia -0.7 6.7 3.3 4.3 4.0 4.0

Memo: Least Developed Countries (LDCs)

Volume of merchandise exports -1.5 -2.2 -0.6 4.6 1.8 3.7

Volume of merchandise imports -8.4 6.5 0.2 -4.8 5.9 5.6

Real GDP at market exchange rates 0.1 3.3 4.2 3.3 4.3 4.7

a Figures for 2023 and 2024 are projections.

b Average of exports and imports.
c Refers to South and Central America and the Caribbean.
d Refers to Commonwealth of Independent States (CIS), including certain associate and former member states.

Note: These projections incorporate mixed-data sampling (MIDAS) techniques for selected countries to take advantage of
higher-frequency data such as container throughput and financial risk indices.
Sources: WTO for trade, consensus estimates for GDP.

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Chart 6: Merchandise exports and imports by region, 2019Q1-2025Q2

Volume index, 2019=100

Exports Imports
140 130

130 120

120
110
110
100
100
90
90

80 80

70 70
2019Q1

2019Q1
2025Q2

2025Q2
2019Q2
2019Q3
2019Q4
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
2024Q2
2024Q3
2024Q4
2025Q1

2019Q2
2019Q3
2019Q4
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
2023Q4
2024Q1
2024Q2
2024Q3
2024Q4
2025Q1
North America South America a Europe Asia
CIS b Africa Middle East

a Refers to South and Central America and the Caribbean.

b Refers to the Commonwealth of Independent States, including certain associate and former member states.
Note: Figures for 2024Q3 to 2025Q2 are projections.
Sources: WT0-UNCTAD through 2024Q2, WTO thereafter.

Merchandise exports of least developed countries (LDCs) are projected to increase by 1.8% in 2024,
marking a slowdown from the 4.6% growth recorded in 2023. Export growth is expected to pick up in 2025,
reaching 3.7%. Meanwhile, LDC imports are forecast to grow 5.9% in 2024 and 5.6% in 2025, following
a 4.8% decline in 2023. These forecasts are underpinned by GDP growth estimates for LDCs of 3.3% in
2023, rising to 4.3% in 2024 and 4.7% in 2025.

Chart 6 shows quarterly merchandise export and import volume developments by region through the second
quarter of 2025. Exports from Asia surged following the COVID-19 pandemic but have plateaued at a high
level, partly explaining the region’s weak export growth since then.

If the forecast is realized, by the second quarter of 2025 Asian exports will have risen 29.4% compared
to their average level in 2019, followed by South America, North America and the Middle East with export
growth over the same period of 10.1.%, 9.1% and 5.7% respectively. African exports are expected to have
declined by 1.8%, while European exports are projected to be 2.1% lower. Meanwhile, exports from CIS
countries are expected to decline by 10.1% over the same period.

In terms of import growth, the CIS region is expected to see the largest increase between 2019 and
mid-2025, with imports up 21.0%, followed by the Middle East at 19.3% and South America at 18.5%. Asia
is forecast to experience a 17.6% increase in imports, while North America will see a gain of 15.1%. Africa’s
imports are set to rise just 2.0% over the same period, while Europe will be the only region to experience an
outright decline in imports of -1.4%.

Contributions to growth by region

Europe has continued to weigh heavily on global merchandise trade in 2024, acting as a drag on overall
performance for both imports and exports. The main sectors driving European negative export performance
are chemicals and vehicles. Organic chemicals, which are precursors to other medicines, are reverting to
trend after a surge in demand during the pandemic. The contraction in the automotive sector raises more

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Chart 7: Contributions to merchandise trade volume growth by region, 2022-2025

Annual % change

Exports Imports

4.0 4.0
3.3
3.1 2.9 3.0
3.0 3.0
2.0
2.0 2.0
1.4
1.0 1.0

0.0 0.0

-0.3
-1.0 -1.0

-2.0 -2.0
-2.0
-3.0 -3.0
2022 2023 2024 2025 2022 2023 2024 2025

North America Europe Asia Rest of World World

Source: WTO estimates.

concerns due to potential ripple effects across value chains. In European imports, the largest contraction
was in machinery, with a substantial reduction in imports from China. This reduction is not simply the result
of fragmentation, since similar declines are observed across geopolitically aligned economies such as the
United States, the Republic of Korea and Japan. Conversely, imports from India and Viet Nam are rising,
hinting at their emerging role as “connecting” economies.

In contrast, Asian exports are experiencing a rebound, driven by key manufacturing economies such as
China, Singapore and the Republic of Korea. Japan, however, remains stagnant, with exports flat in 2024
following a contraction in 2023. On the import side, Asia presents a mixed picture. Chinese import growth
remains moderate, while Singapore, Malaysia and other Asian economies, including India and Viet Nam,
show stronger growth. In light of the risk of geopolitical fragmentation, this hints at the role of “connecting”
economies in global supply chains and trade.

South America is rebounding in 2024, recovering from weaknesses in both exports and imports experienced
in 2023. North American trade is largely driven by the United States, although Mexico stands out with stronger
import growth compared to the region as a whole. Mexican imports are rebounding after a contraction in
2023, underscoring the country’s growing role as a “connecting” economy in trade. Africa’s export growth
is in line with the global trend. It has been revised downward from the April forecast, driven by an overall
revision of Africa’s trade statistics, and a greater-than-expected weakening in Europe’s imports, Africa’s
main trade partner. In April, we forecasted a contraction in CIS imports for 2024, but we now project 1.1%
growth, driven by stronger-than-expected GDP growth. The Middle East had a major revision in its data,
explaining the discrepancy between the April forecast and current projections.

These developments are summarized in Chart 7. Europe was responsible for subtracting 1.9 percentage
points from world import volume growth of -2.0% in 2023. In the WTO’s previous forecast in April, Europe
was expected to make a small but positive contribution to world import demand in 2024 and a larger one
in 2025, but this has not turned out to be the case. In light of more recent data, Europe is forecast to make
a negative contribution of -0.8 percentage points to world import growth of 2.0% in 2024, while North
America and Asia make positive contributions of 0.6 percentage points and 1.4 percentage points. Europe’s
contribution to export growth is also expected to be negative this year at -0.5 percentage points while North
America and Asia are expected to add 0.3 percentage points and 2.8 percentage points, respectively.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Risks to the outlook

Risks to the trade forecast are numerous and firmly tilted to the downside. These risks include widening
regional conflicts, monetary policy divergence leading to financial volatility, and fragmentation of supply
chains linked to geopolitical considerations. There is also some limited upside potential if interest rate cuts
in advanced economies have a larger-than-expected positive impact on growth without reigniting inflation.

An escalation of the conflict in the Middle East could have negative consequences for global and regional
trade flows, particularly for any countries directly involved. The effects would also be felt in other regions,
including through further disruptions to shipping and rising energy prices due to higher risk premiums. The
disruptive impact of the Red Sea crisis has been contained to date (see Box 1), but other routes could be
impacted in a wider conflict. There would also be a heightened risk of energy supply disruptions given the
region’s prominent role in petroleum production. Higher energy prices would dampen economic growth in
importing economies and weigh on trade indirectly.

Diverging monetary policies across major economies could also produce bouts of financial volatility if they
trigger sudden shifts in exchange rates or capital flows. This could make debts harder to service for some
economies, particularly poorer ones. A separate but related risk is that policymakers act too cautiously,
resulting in an economic slowdown, or too aggressively, risking a return to rising inflation.

The WTO has observed increasing signs of fragmentation in trade flows since the onset of the war in
Ukraine, with exports and imports reorienting along geopolitical lines. Chart 8 illustrates these trends.
Estimates suggest that trade between hypothetical blocs composed of economies holding similar political
views (based on voting patterns in the United Nations General Assembly, labelled as East and West) has
grown 4% more slowly than trade within these blocs since the outbreak of war in Ukraine. So far, this trend
is limited to the least complex products, where alternative suppliers are relatively easy to find.

Chart 8: Trade within and between hypothetical geopolitical blocs (left) and the difference
between “within bloc” and “between bloc” trade (right)
Annual % change

Trade within and between hypothetical Difference of between bloc

geopolitical blocs and within bloc trade
125 60
50
115
40
105 30

95 20
10
85
0
75 -10
-20
65
-30
55 -40
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24

Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
Oct-22
Jan-23
Apr-23
Jul-23
Oct-23
Jan-24

Trade within East/West War in Ukraine Average 2018-2021 War in Ukraine

Trade between East and West Average 2022-2023

Note: Seasonally adjusted series. Russian Federation, Belarus and Ukraine are excluded. Left-hand series indexed at 100 in January
2022. Right-hand series indexed at 0 in January 2022.
Sources: Blanga-Gubbay and Rubínová (2024).

11
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Box 1: Update on the Panama/Suez Canal crisis

Maritime shipping is the main mode of transport for internationally traded goods, accounting for more
than 80% of international trade by volume. As a result, demand for maritime freight is highly inelastic,
which means that changes in freight rates do not significantly affect the quantity of goods being shipped.

However, in 2023, a severe drought forced the Panama Canal, which handles 6% of global trade, to
limit the number of ships allowed to pass through it each day. Although drought conditions have since
been eased, navigation remained limited until August 2024.

Globally, monthly maritime freight costs have increased almost five-fold since October 2023, from
US$ 1,095 to US$ 5,040. However, currently average freight costs remain half as high as during the peak
of the pandemic crisis in September 2021, when the average monthly freight costs reached US$ 10,865.
The initial increase was partly due to congestions in the Panama Canal and the Red Sea (see Chart 9).

The attacks on commercial ships in the Red Sea and the Gulf of Aden, which handles around 15% of
global trade, have also had a major impact on shipping since November 2023. The attacks led many
carriers to avoid the Red Sea altogether, rerouting vessels around the Cape of Good Hope and causing
daily Suez Canal passages to decrease by more than 60%. For most trade routes, rerouting via the Cape
of Good Hope results in minimal delays, but Asia-Europe is an exception, experiencing an increased
travel time of six to 25 days compared to the more direct route through the Suez Canal.

The rise in freight costs since April 2024 can be attributed to several factors, including increased
consumer activity, strikes in the transportation sector, shipping accidents, and extreme weather events.
While demand was relatively weak in the early months of 2024, consumer spending in both Europe and
Asia has since risen, resulting in an increase in maritime freight shipments.

The North American freight market faced significant challenges since last April, such as a rail strike in
Canada and the collapse of the Baltimore bridge, which blocked access to the port for over a month. In
mid-April 2024, heavy fog disrupted operations at two of China’s largest ports, Shanghai and Ningbo,
while ports in Malaysia and Singapore experienced delays due to heavy rainfall. More recently, in
September 2024, Typhoon Bebinca caused severe congestion at major Chinese container ports.

Chart 9: Evolution of maritime freight costs and passages in Panama and Suez canals,
January 2023-September 2024
Index (100 = November 2023)

500

400

300

200

100

0
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep.
2023 2024

Average daily Suez Canal passages Average monthly maritime freight costs
Average daily Panama Canal passages

Note: The figure displays the average monthly freight spot rates for 40-foot containers and the average daily number of passages
in the Panama Canal and Suez Canal. The average monthly data for September 2024 covers the 1-17 September period.
Source: WTO Secretariat elaboration based on freight costs data from Freightos and daily transit ship calls from IMF-Oxford
Portwatch.

12
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

On the other hand, the data do not show any signs that recent geopolitical tensions have led to an overall
trend towards regionalization of global trade, or near-shoring. No continent shows signs of increased trade
regionalization while Africa’s intra-regional trade has grown even more slowly than its extra-regional trade
since the COVID-19 pandemic. This relative growth of Africa’s extra-regional trade since the COVID-19
pandemic was driven by complex products.

Trade-related indicators

Purchasing managers’ indices (PMIs) based on business surveys provide a reliable indication of global
economic activity, while the new export orders component provides a timely signal of the short-term outlook
for trade. Chart 10 shows global PMIs for manufacturing and services compiled by JPMorgan and S&P
Global for the period January 2019 to September 2024. Index values greater than 50 signal expansion while
values less than 50 denote contraction. The headline manufacturing PMI dropped to 48.8 in September,
suggesting that manufacturing activity is slowing again worldwide. On the other hand, the services PMI
remained firmly in expansion territory at 52.9, although it did turn down in the latest month.

Meanwhile, the manufacturing new export orders index has fallen from 50.4 in May to 47.5 in September,
which suggests a cooling of trade in manufactured goods. In contrast, the services new export orders index
rose to 51.7, its highest level since July 2023. Overall, the PMI suggests that trends may diverge between
manufacturing and services trade in the coming months.

PMIs are based on business surveys that can be influenced by sentiment, but freight data are more or less
directly linked to trade flows. Strong recent growth in sea and air freight indices suggest that the negative
signal in the PMIs may be overdone.

The RWI/ISL throughput index is based on container traffic of 92 ports accounting for 64% of world trade,
making it a reasonable proxy for global goods trade (see Chart 11). In August, the index rose to its highest
level on record, with traffic rising in China, Northern Europe and the rest of the world. For the year to date
through August, total throughput is up 5.7%, including in Northern Europe where port traffic had fallen more
than 20% between November 2021 and January 2024. The fact that container traffic has continued to rise
in recent months suggests that the trade impact of the Red Sea crisis has been limited.

Chart 10: Global Manufacturing Purchasing Managers’ Indices, January 2019-September 2024
Diffusion index, baseline = 50

PMIs New Export Orders

60 60

50 50

40 40

30 30

20 20
Jan 2021

Jul 2021
Apr 2021

Oct 2021

Jan 2021

Jul 2021
Apr 2021

Oct 2021
Oct 2022
Apr 2019

Apr 2022

Jan 2023
Apr 2023
Jul 2023
Jul 2022

Oct 2022

Jul 2023
Oct 2023

Apr 2019

Apr 2022

Jan 2023
Apr 2023
Jul 2019

Jan 2022
Oct 2020

Oct 2024

Jul 2022
Oct 2019

Jul 2019

Jan 2022

Oct 2023
Apr 2024
Jul 2024

Oct 2020
Jan 2024
Jan 2019

Jan 2020

Oct 2019

Oct 2024
Jul 2020

Apr 2024
Jul 2024
Apr 2020

Jan 2019

Jan 2020

Jan 2024
Jul 2020
Apr 2020

Manufacturing PMI Services PMI Manufacturing new export orders

Services new export orders

Note: Values greater than 50 indicate expansion while values less than 50 denote contraction except for supplier delivery times,
where larger numbers represent faster shipments.
Sources: J.P. Morgan and S&P Global.

13
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 11: RWI/ISL container throughput index, January 2019-August 2024

Seasonally-adjusted index, 2015=100

160

150

140

130

120

110

100

90
Mar-21

Sep-21
Nov-21
May-21
Jan-21

Jul-21

Jul-23

Jul-24
May-23

May-24
Jan-19

Jan-20

Nov-20

Jan-23

Jan-24
May-19

May-22
Jan-22
Mar-19

Sep-22
Nov-22

Sep-23
Nov-23
Sep-19
Nov-19

May-20

Sep-20
Jul-19

Jul-20

Jul-22
Mar-20

Mar-22

Mar-23

Mar-24
Total a North range b China Total excl. China

a Based on throughput data from 92 ports accounting for approximately 64 % of global container traffic.
b Summarizes throughput of the ports of Le Havre, Zeebrugge, Antwerp, Rotterdam, Bremen/Bremerhaven and Hamburg.
Sources: RWI - Leibniz Institute for Economic Research and Institute for Shipping Economics and Logistics (ISL).

Air freight can substitute for other means of transporting goods when the latter are disrupted - for example, as
a result of regional conflicts or labour disputes. Chart 12 shows year-on-year growth in air freight tonnages
and rates by the origin region in the first two weeks of September 2024. Chargeable weight was up 10%
worldwide, with shipments from the Asia-Pacific region up 14% and shipments from the Middle East and
South Asia up 13%. Increased demand for air cargo has also caused air freight rates to rise precipitously in
Asia Pacific (+24%) as well as in the Middle East and South Asia (+56%).

Chart 12: Growth in air freight tonnages and rates, 15 September 2024
Year-on-year % change

Chargeable weight (YoY % change) Rate (YoY % change)

16 70

14 60
14
12 13 50 56
10 11 40
10
8 30
8 8
6 20 24
6
4 10 14 4
2 0
0 -7 -7
0 -10
fic

fic
a

a
a

a
ia

ia
a

a
e

e
pe

pe
ic

ic
ic

ic
ric

ric
id

id
As

As
ci

ci
ro

ro
er

er
er

er
w

w
Af

Af
Pa

Pa
Eu

Eu
ld

Am

ld

Am
Am

Am
S.

S.
-

-
or

or
ia

ia
&

t&
W

W
S.

S.
th

th
As

As
t
as

as
or

or
.&

.&
N

N
.E

.E
C

C
M

Region of origin

Note: Last two weeks compared to the same two weeks of the previous year.
Source: WorldACD.

14
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Trade in value terms

Merchandise trade

The US dollar value of world total merchandise trade was nearly flat (up just 0.1%) in the first half of 2024
compared to the same period in 2023 (see Chart 13). This marks an improvement over the previous six
months, when total merchandise trade was down 5% year-on-year.

Chart 13: Year-on-year merchandise trade growth by product, 2024 (January-June)

Year-on -year % change

-20 -10 0 10 20 30 40 50

0
Total merchandise
27

-1
Agricultural products
33

-1
of which: food
38

-7
Fuels and mining products
33

-7
of which: fuels
32

2
Manufactures
20

-9
Iron and steel
17

-3
Chemicals
26

6
Office and telecom. equip.
25

4
of which: electronic components
41

1
Autmotive products
17

-2
Other machinery a
26

-3
Textiles
-3

-2
Clothing
6

2024/2023 (Jan.-Jun.) 2024/2019 (Jan.-Jun.)

a Includes electrical machinery, non-electrical machinery and power generating equipment.

Source: WTO estimates based on mirror data.

15
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 14: Merchandise trade growth of selected economies, first half of 2024
Year-on -year % change

Merchandise Exports Merchandise Imports

Viet Nam* 16% Viet Nam* 18%

Argentina* 15% Paraguay* 12%

Hong Kong, China 14% Costa Rica 11%
Paraguay* 13% Hong Kong, China 10%
Chinese Taipei 11% Ukraine 9%
Korea, Republic of* 10% Singapore* 9%
Costa Rica 9% Malaysia 7%
Singapore* 6% Chinese Taipei 6%
India* 4% Guatemala 6%
China* 4% Brazil* 6%
Chile* 4% India* 5%
Switzerland* 4% United States 3%
Mexico 3% China* 3%
Brazil* 2% Australia 2%
United States 2% Mexico 1%
Ukraine 1% Indonesia 1%

New Zealand* 0,4% El Salvador* 1%

Guatemala -1% Norway* -1%
Russian Federation -1% Switzerland* -2%
Italy -1% United Kingdom -3%
Czech Republic -1% Czech Republic -3%
Germany -2% Chile* -3%
Malaysia -2% Korea, Republic of* -4%
United Kingdom -2% Denmark -5%
France -3% Germany -6%
Indonesia -3% France -7%
Japan -4% Italy -7%
South Africa -4% Russian Federation -9%
Denmark -5% Israel -9%
Austria -5% Netherlands -9%
Israel -6% South Africa -9%
Norway* -6% New Zealand* -10%
El Salvador -6% Japan -11%
Netherlands 6% Austria -12%
Belgium -9% Belgium -12%
Australia -11% Bolivia, Pl. State of -16%
Bolivia, Pl. State of -21% Argentina* -26%

-20% -10% 0% 10% 20% -20% -10% 0% 10% 20%

Note: * January to July.

Source: WTO.

16
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Merchandise trade continues to move in a positive direction, with year-on-year growth in value terms rising
from -8% in the third quarter of 2023 to +2% in the second quarter of 2024. This shift is partly due to the
fading influence of the spike in global commodity prices that followed the outbreak of the war in Ukraine in
2022. On average, global commodity prices were down 1% year-on-year in the first half of 2024 after being
down 23% in the second half of 2023, according to World Bank statistics.

The influence of exchange rates on US dollar-denominated trade flows was limited in the first half of 2024.
According to statistics from the Bank for International Settlements (BIS), the dollar appreciated 2.2% against
a broad basket of currencies during this period after depreciating 1.1% in the previous six months, leaving its
value nearly unchanged over 12 months. A general appreciation of the US dollar tends to diminish the value
of world trade measured in dollar terms, whereas a general depreciation tends to inflate it.

Trade in agricultural products was down 1% year-on-year in the first half of 2024. Trade in manufactured
goods rose 2% over the same period, while trade in fuels and mining products fell 7%. Most categories of
manufactured goods recorded small declines over the previous year, the main exceptions being iron and
steel (-9%), and office and telecom equipment (+6%).

The negligible change in total merchandise trade in the first half of 2024 masks larger changes in individual
economies. Several economies in Asia saw big increases in both exports and imports while others in South
America and Europe recorded declines, particularly on the import side (see Chart 14). For example, Viet
Nam’s exports and imports rose 16% and 18%, respectively, compared to the first half of 2023. Singapore
also saw a 6% rise in exports and a 9% jump in imports.

The United States and China both recorded moderate increases in the values of their exports (2% and
4%, respectively) and imports (3% each). Major European economies recorded small declines in exports
paired with larger contractions in imports. For example, Germany’s exports were down 2% while its imports
dropped 6%. Similarly, France’s exports declined by 3% while its imports fell 7%. The largest decline on the
export side was recorded by Bolivia, with a contraction of 21%. Meanwhile, Argentina’s imports plunged
26% as its economy remained in crisis.

Services trade

World commercial services trade rose on average 8% year-on-year in the first quarter of 2024, rising steadily
over the last four quarters (see Chart 15). Growth was driven in particular by the category “other commercial
services”, which includes many digitally deliverable sectors, such as professional and business services,
financial services and information and communications technology (ICT) services.

In the first quarter of 2024, services exports increased by 9% in both North America and Asia, while Europe
recorded an 8% rise. On the import side, Asia led other regions with 9% growth, followed by North America
and Europe, each reporting a 6% increase.

International travel continued to recover, up 19% year-on-year. Growth is stabilizing after a post-pandemic
surge, as evidenced by declining year-on-year growth rates. Due to disruptions on key trade routes caused
by attacks in the Red Sea, freight rates have surged in 2024. The global spot price for a 40-foot container
quadrupled from its levels at the end of 2023, settling at about US$ 4,500 at the end of September
(source: Freightos). If shipping rates stay high, transport growth will accelerate. The transport sector has
experienced considerable volatility in recent years.

Chart 16 shows year-on-year growth in commercial services trade by main sectors for selected economies
in the first half of 2024. Most leading services traders experienced growth in both exports and imports during
this period except for France, where imports declined by 2%, and Germany where exports growth slowed
to 1%.

17
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 15: Growth in world trade in commercial services, 2023Q2-2024Q1

Year-on -year % change

Commercial Other commercial Goods-related

services Transport Travel services services

50

41
40

31
30 29

20 19

9 8 9 8 9 10 10 8 9 10
10
6 5
0
0

-10 -7
-12
-14
-20

2023Q2 2023Q3 2023Q4 2024Q1

Note: Trade refers to average of exports and imports.

Source: WTO-UNCTAD estimates.

In the United States, services exports were up 8%, with growth in all main sectors, and a peak of 17% in
travel, and 8% in transport. The United Kingdom saw a 14% increase in services imports, driven by other
business services. Financial services exports, some 20% of the country’s exports, rose 13%.

Ireland recorded the highest exports growth among the leading traders. Services exports surged by 25%
year-on-year, fuelled by a 20% increase in computer services, which account for more than half of Ireland’s
services exports. Growth was also lifted by a 71% rise in other business services, mainly research and
development (R&D) services, and a 24% increase in financial services exports.

In China, services exports rose 8% in the first half of 2024. The increase was led by travel, which soared
126% as visa relaxation policies resulted in a sharp increase in international tourist arrivals (up by 152%).
Transport exports returned to growth, expanding by 10% year-on-year, following a sharp 40% annual drop in
2023. Sharp declines in insurance and pension services (down 70%) and financial services exports (down
14%) limited growth in other commercial services.

India’s services exports rose by 7% in the first six months of 2024. This reflects a somewhat lower ICT
services exports growth, at 4%, due to a weak first quarter, which followed a remarkable double-digit growth
rate since the COVID-19 pandemic. ICT exports bounced back in the second quarter of 2024, with year-
on-year growth exceeding 8%.

18
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 16: Commercial services trade growth of selected economies by sector in the first half
of 2024
Year-on -year % change

Total commercial services Transport

United States 8 United States 8

7 4

United Kingdom 6 United Kingdom 5

14 -11

Germany 1 Germany -1
4 -2

Ireland 25 Ireland 1
12 8

China 8 China 10
14 -2

France 2 France -10

-2 -3

India 7 India 6
4 5

Singapore 9 Singapore 13
6 8

Japan 7 Japan 4
2 -1

Korea, Republic of 10 Korea, Republic of 9

7 5

-5 0 5 10 15 20 25 30 -15 -10 -5 0 5 10 15 20

Travel Other commercial services

United States 17 United States 5

13 5

United Kingdom 16 United Kingdom 4

20 16

Germany 5 Germany 2
7 4

Ireland 4 Ireland 27
7 14

China 126 China 2

38 4

France 5 6
France
-4 -1

India 17 6
India
0 5

Singapore 23 5
Singapore
25 3
Japan 42
Japan -1
33 1
Korea, Republic of 8 11
Korea, Republic of
10 7

-20 0 20 40 60 80 100 120 140 -5 0 5 10 15 20 25 30

Exports Imports

Source: National statistics.

19
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 17: Services trade growth of selected economies, first half of 2024
Year-on -year % change

Services exports Services imports

Brazil 10% Brazil 18%

Pakistan 8% Morocco 16%

Sweden 8% Pakistan 14%

Portugal 7% Slovak Republic 10%

Italy 7% Greece 7%

Greece 7% Poland 6%

Finland 7% Canada 6%

Ukraine 6% Sweden 6%

Morocco 6% Portugal 5%

Lithuania 5% Hungary 5%

Canada 5% Romania 3%

Slovak Republic 4% Italy 3%

Hungary 4% Germany 3%

Luxembourg 4% Denmark 3%

Malta 2% Slovenia 3%

Poland 2% Lithuania 3%

Germany 1% Luxembourg 2%

Estonia 1% Belgium 2%

Slovenia 0% Estonia 1%

Denmark -1% Latvia 0%

Belgium -1% Russian Federation 0%

Latvia -1% Finland -1%

Bulgaria -1% Mongolia -1%

Russian Federation -2% Czech Republic -1%

Romania -3% Malta -4%

Czech Republic -3% Bulgaria -11%

Mongolia -4% Ukraine -16%

-20% -10% 0% 10% 20% -20% -10% 0% 10% 20%

Source: Monthly national statistics.

20
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Evidence of decoupling and fragmentation

Trade in intermediate goods provides a useful gauge of the status of global value chains (GVCs). This is
illustrated by Chart 18, which shows exports of non-fuel intermediate goods in US dollar terms (left panel)
as well as their share in non-fuel world trade (right panel).

Trade in parts and accessories – a subset of components of electronics, transport equipment and other
machinery – illustrates how geopolitical tensions may be influencing supply chains in globalized manufacturing
industries. This is illustrated by Chart 19.

The trade tensions between China and the United States have had a strong impact on trade between the two
economies, which was further compounded by the global uncertainty and geopolitical tensions following the
start of the war in Ukraine. There are two clear periods of decline in their bilateral trade: since the beginning
of the trade tensions between the two countries in July 2018, and following the war in Ukraine in February
2022. A sharp recovery in February 2020, explained by the role of China in global supply chains during the
COVID-19 pandemic, is also visible.

The decoupling of trade between the two economies occurred across the entire spectrum of goods, although
since the war in Ukraine it has accelerated in complex products. This makes it different from the alignment of
global trade with geopolitical affinities, which is limited to the least complex products. Part of the explanation
for this difference undoubtedly lies in the increase in reciprocal import tariffs between the two economies,
which targeted all types of products. In addition, since the onset of the war in Ukraine, the decoupling of
trade between the two countries has accelerated the most for the most complex products. Since the trade
policy driving decoupling has been underway for more than five years, it is plausible that this has provided
the necessary adjustment period for the two countries to find or develop new production capacities and to
diversify sources of supply, even for the most complex products.

Chart 18: World exports of non-fuel intermediate goods, 2022Q1‑2024Q2

Index of US dollar values 2022Q1=100 and % share

Exports of non-fuel IGs Share of non-fuel IGs in world exports

Index 2022Q1=100 % share

106 58
104
104 57
57 57
102 56
100 100
100 55 56

98 97 54 55
96 96 96 54
95 54 54
96 53 53 53
94 94
94 52
52
92 51

90 50

88 49
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2022 2023 2024 2022 2023 2024

Source: WTO estimates.

21
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 19: Trade between the United States and China and with other partners
Index, June 2018=100

170
War in
Ukraine
150
COVID-19
pandemic
130
Trade
tensions
110

90

70

50

oct-21
jul-21
jan-21
apr-21
apr-17

apr-22
oct-16

oct-17
jan-16
apr-16

oct-18
jul-16

jul-17

jul-18

jul-19

apr-20
jul-20

jul-22

jul-23
jan-19

jan-23
apr-18
jan-17

oct-23
jan-20
oct-19

oct-20

oct-22
jan-22

apr-23

jan-24
apr-19
jan-18

Trade of the United States and China with other partners

Trade of the United States and China with each other
Exports of China to Viet Nam and Mexico, and Import of the United States from Viet Nam and Mexico

Note: Seasonally adjusted series. Russian Federation, Belarus and Ukraine are excluded. Series indexed at 100 in June 2018. RoW
stands for the rest of the world. The orange line shows the evolution of trade flows between China and the United States. The blue
line shows the evolution of trade flows between the United States and partners other than China, and between China and partners
other than the United States. The green line shows exports of China to Viet Nam and Mexico, and imports of the United States from
Viet Nam and Mexico.
Sources: Blanga-Gubbay and Rubínová (2024).

Mexico and Viet Nam have emerged as “connecting” economies – stepping in as the source for many
products - in the restructuring of global supply chains that serve the US market (Alfaro and Chor, 2023).
This is illustrated in Chart 18, where Mexico and Viet Nam are separated from the rest of the world. It shows
that trade of these two economies with the United States and with China evolved in tandem with the rest of
the world even after the start of the trade tensions. However, this has changed since the start of the war in
Ukraine, when these two economies’ trade with China and the United States significantly outpaced not only
China-US bilateral trade but also their trade with other economies.

22
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Analysis: Thirty years of trade-led growth since

the Marrakesh Agreement
This year marks the 30th anniversary of the signing of the Marrakesh Agreement founding
the WTO. Since then, the world has witnessed a fivefold increase in global trade, which has
coincided with a significant decrease in poverty worldwide, indicating the impact of trade on
supporting economic growth and improving people’s lives.

The Marrakesh Agreement Establishing the WTO emphasized the need to ensure that developing economies,
particularly the least developed, secure a fair share in the growth of international trade. Since the WTO was
established 30 years ago, income disparities between economies have dramatically narrowed. Per capita
incomes in low- and middle-income economies have nearly tripled, while global per capita income has grown
by approximately 65%.

Trade and income convergence between developing and developed economies are closely intertwined. There
is a striking correlation between the pace of income growth of low- and middle-income economies and their
participation in world trade. As shown in Chart 20, both income convergence and trade participation rose in
tandem before the global financial crisis of 2008 and fell in unison after the crisis. Economic research helps
to reveal the reasons for this. Access to foreign markets for both exports and imports boosts productivity, and
ultimately economic growth. This is achieved by greater economies of scale, better access to intermediate
goods, enhanced competition, technology diffusion and greater incentives to innovate.

The trade-led convergence in incomes between developed and developing economies has improved the lives
of hundreds of millions of people. As shown in Chart 21, the share of people living below the poverty line in low-
and middle-income economies has dropped from 40% in 1995 to around 11% today, while the share of these
economies in global exports has doubled from about 16% to 32%. This shift has significantly contributed to
reducing malnutrition and infant mortality, as well as improving access to education, healthcare and electricity.

Chart 20: Correlation between low- and middle-income economies’ growth and trade
participation, 1996-2021
8 160

7
140
Speed of income convergence

6
(index 100 = 1996)
(percentage points)

Trade participation

5 120

4
100
3

2 80

1
60
0

-1 40
19 6
19 7
19 8
20 9
20 0
20 1
20 2
20 3
20 4
20 5
20 6
20 7
20 8
20 9
20 0
20 1
20 2
20 3
20 4
20 5
20 6
20 7
20 8
20 9
20 0
21
9
9
9
9
0
0
0
0
0
0
0
0
0
0
1
1
1
1
1
1
1
1
1
1
2
19

Speed of income convergence Trade participation

Note: The figure displays the evolution of the population-weighted averages of trade participation and income convergence speed
between 1996 and 2021. Trade participation is measured as the share of goods and commercial services trade in GDP, adjusted
for country size. The speed of income convergence is measured as the difference between the average growth rate of low- and
middle-income economies’ real GDP per capita and the average growth rate in high-income economies. The lighter shade indicates
negative growth in high-income economies. The income groups are based on the World Bank’s 1995 classification.
Source: WTO (2024).

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 21: Increased share of low- and middle-income economies in global exports is
accompanied by substantial poverty reduction, 1995-2022

40%

35%

30%

25%

20%

15%

10%

5%
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Poverty headcount (% of population) Exports of goods and services (% of global trade)

Note: The figure displays the evolution of the average share of poverty headcount at US$ 2.15 a day (2017 PPP) in the population
and the share of low- and middle-income economies in global exports of goods and services over the period 1995-2022. The
income groups are based on the World Bank’s 2022 classification.
Source: WTO (2024).

Rapid decline in global trade costs has fuelled trade expansion

The expansion of global trade has been fuelled by technological advances that have reduced the costs
of transportation, communication and transactions as well as by trade policy reforms that have reduced
trade barriers, helped to create a more level economic playing field and contributed to a transparent and
predictable international business environment.

Overall, global trade costs declined by approximately 8% between 1995 and 2020. This led to a notable increase
in global trade, estimated at around 30 to 45%. Low-income economies saw the greatest reductions in trade costs
(almost 10%). This is even more remarkable given that they started at the highest level (see Chart 22). Analysis
suggests that the income convergence of low- and middle-income economies with high-income economies
between 1995 and 2020 was up to one-third faster thanks to these trade cost reductions (WTO, 2024).

Chart 22: Reductions in trade costs, 1995-2020

0.9% 0.8%

-7.5% -7%
-8.3%

-2.7%

-6.6% -7.5% -9.7%

High-income Middle-income Low-income
1995 - 2008 2008 - 2020

Note: The figure presents the simple average of the trade cost index across 71 economies.
Source: WTO Trade Cost Index methodology based on data from OECD Trade in Value Added (TiVA) 2023 Inter-Country Input-
Output Tables.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 23: Increasing share of low- and middle-income economies in global trade, 1995-2022

100%

90%

80%

70%
Total bilateral trade

60%

50%

40%

30%

20%

10%

0%

21
22
14
15
16
17
18
19
20
08
09
10
11
12
13
04
05
06
07
01
02
03
95
96
97
98
99
00

20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
19
19
19
19
19
20
20

Between low Between high-income Between

or middle-income and low or middle-income high-income

Note: The figure displays the composition of global merchandise trade flows by income group. The analysis excludes trade within
the European Union (i.e. intra-EU trade). The income groups are based on the World Bank’s 1995 classification.
Source: WTO (2024).

Thanks to the rapid fall in trade costs and strong economic growth, trade between low- or middle-income
economies surged from 5% of global trade in 1995 to nearly 20% by 2022. Trade between high-income
economies and low- or middle-income economies now dominates global trade. In contrast, while trade between
high-income economies accounted for over half of global trade in 1995, by 2022 this proportion had declined
to 32%, confirming a shift in trade flows towards developing and emerging economies (see Chart 23).

The WTO has played a pivotal role in reducing trade costs

WTO membership has significantly contributed to global trade cost reductions. An important contribution
has come from the lowering of import tariffs. The simple average tariff applied by WTO members on a most-
favoured nation (MFN) basis – whereby WTO members extend the same trade treatment to all other WTO
members – declined from 12.5% to 8.5% between 1996 and 2023 (see Chart 24). Multilateral commitments
by WTO members account for a quarter of this decline. Despite the expansion of regional trade agreements
and preferential tariff schemes, MFN tariff rates play a very important role as more than 80% of global trade
is conducted on an MFN basis (Gonciarz and Verbeet, 2024).

Underscoring the benefits of the multilateral trading system, recent research suggests that the overall
reductions in trade costs associated with membership in the WTO (and its predecessor, the General
Agreement on Tariffs and Trade) boosted trade between members by an average of 140% (see Chart 25).
Moreover, policy reforms implemented in many developing economies during their WTO accession process
have had additional positive effects on their income growth. Analysis shows that economies undergoing
rigourous WTO accession negotiations grew 1.5 percentage points faster during their accession period and
continued to grow faster after their accession to the WTO (Brotto et al., 2024).

Multilateral cooperation remains key to building an inclusive global trading system that supports the
transformation to a digital and sustainable global economy.

The greater participation of developing economies in global trade has boosted inclusivity over the past 30
years. At the same time, digital transformation and environmental sustainability challenges have had a major
impact on the composition of global trade.

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

Chart 24: Contribution of multilateral commitments to reductions in MFN tariff rates,

1996-2023
12.5%

3 p.p.

1 p.p. 8.5%
Applied MFN tariff rate

Multilateral reduction

Unilateral reduction

1996 2023

Note: The figure displays the reductions in the average applied MFN tariff rate in terms of multilateral and unilateral reductions
expressed in percentage points (p.p.). The multilateral component is the reduction in applied MFN tariffs on products in economies
where the bound rate in 2023 was lower than the applied rate in 1996. The unilateral component is the reduction in the remaining
applied MFN tariffs. The figure is based on data for economies that are WTO members since 1996.
Source: WTO (2024).

The digital transformation has dramatically increased the potential of some services to be traded across
borders. Digital delivery includes services traded across borders via computer networks (through the internet,
mobile apps, emails, voice and video calls), and increasingly through digital intermediation platforms (such as
those used for online gaming, music and video streaming, and remote learning).

Exports of digitally delivered services have experienced a fourfold increase in value since 2005, rapidly
outpacing the growth of goods and other services exports (see Chart 26). Consequently, digitally delivered
services accounted for over 54% of total services exports, and for 13.8% of total combined exports of goods
and services in 2023.

Chart 25: Positive impact of GATT/WTO membership on trade

180%

160%
Estimated average impact of GATT/WTO

140%
membership on bilateral trade

120%

100%

80%

60%

40%

20%

0%
-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10

Years prior to and following GATT/WTO Accession

Source: Larch et al. (2024).

26
 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

The efforts to address global sustainability challenges have promoted trade in environmental technologies.
Trade facilitates the wide adoption and diffusion of green technologies, allowing all economies – including
those without complex production capacities – to harness their benefits.

The emergence of new green sectors and increased demand for renewable technologies has also brought
export opportunities for developing economies with comparative advantage in some stages of the production
process, such as the generation of green energy or an abundance of certain critical minerals. As shown in
Chart 26, trade in renewable energy goods (including solar panels and wind turbines) has grown more than
fivefold since 2005.

The ability of economies to benefit from digital trade and trade in green technologies will be critical for
trade-led income convergence between developing and developed economies. Despite impressive income
convergence over the past 30 years, many low- and middle-income economies have remained on the margins
of global trade and have struggled to achieve rapid growth. This was the case even before the COVID-19
pandemic, which hit low-income economies the hardest.

Amid increasing geopolitical tensions and a resurgence of inward-looking economic strategies, the WTO’s
role in maintaining an open, predictable and transparent trade environment remains a cornerstone of global
trade. Further international cooperation to facilitate the adoption of digital and green technologies, and to
develop regulatory frameworks governing these new areas, can ensure that developing economies benefit
from the most dynamic sectors of global trade. It can also ensure that trade remains an important source of
economic growth, helping to raise living standards worldwide.

Chart 26: Export growth of environmental and digital trade compared with other goods and
services, 2005-2023

550

500

450

400
Average annual growth rates

350
(index 2005=100)

300

250

200

150

100

50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Renewable energy goods exports Digitally delivered services exports

Other goods and services exports

Note: The figure displays the evolution of the export growth of environmental goods (specifically, light-emitting diodes (LEDs), solar
and other non-electric water heaters, and wind turbines), digitally deliverable services (financial services, business activities, such
as information, administrative and professional services, and other services traded across borders through computer networks, such
as audio-visual and entertainment services). Estimates for 2023 are preliminary.
Source: WTO (2024).

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 G LOBAL TRAD E OUTLOOK AN D STATI STICS - U PDATE: OCTOB E R 2024

References
Alfaro, L. and D. Chor. (2023). Global Supply Gonciarz, T. and Verbeet, T. (2024), “Significance
Chains: The Looming “Great Reallocation”. NBER of Most-Favoured Nation Terms in Global Trade:
Working Paper No.31661, National Bureau of A Comprehensive Analysis”, WTO Staff Working
Economic Research. Paper, WTO.

Brotto, A., Jakubik, A., Piermartini, R. and Silvy, Larch, M., Monteiro, J.-A., Piermartini, R. and
F. (2024), “Committing to Grow: The Full Impact Yotov, Y.V. (2024), “On the Effects of GATT/WTO
of WTO Accessions”, Staff Working Paper Membership on Trade: They Are Positive and
No. ERSD-2024-06, Geneva: World Trade Large after All”, Canadian Journal of Economics /
Organization (WTO). Revue Canadienne d’Economique, Forthcoming.

Blanga-Gubbay, M. and Rubínová, S. (2024), World Trade Organization (WTO) (2024), World
“Is the Global Economy Fragmenting?”, WTO Trade Report 2024: Trade and Inclusiveness:
Staff Working Paper ERSD-2023-10, WTO. How to Make Trade Work for All, Geneva: WTO.

28
Useful resources

WTO Data - Information on trade and trade policy

measures
data.wto.org
This portal gives access to a selection of key databases
offering statistics and information on various
trade-related measures.

WTO Stats
stats.wto.org
A user-friendly data portal to access a wide range of
WTO statistical indicators on international trade, tariffs,
non-tariff measures and other indicators.

World Trade Organization

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CH-1211 Geneva 2
Switzerland
Tel: +41 (0)22 739 51 11

WTO Publications
Email: publications@wto.org
www.wto.org

© World Trade Organization 2024.

Report designed by Triptik, Annecy.
The WTO’s “Global Trade Outlook and
Statistics” analyses recent global trade
developments. Breakdowns of merchandise
and commercial services trade by sector and
region are provided, together with details on
leading traders. The report is timed to coincide
with the release of the WTO’s latest quarterly
and annual trade statistics, which can be
downloaded from the WTO’s online database
at stats.wto.org.

ISBN 978-92-870-7640-3