Trade Pain – – How Slumping Commerce Threatens Global Growth

The world’s biggest economies are finding it increasingly hard to trade their way out of trouble.
Once the grease of global growth, international commerce failed to rebound completely from the 2009 recession and now is slowing anew. Chinese exports tumbled 5.5 percent in August from a year earlier, while those of the U. S. fell 3.5 percent. South Korea and Singapore witnessed double digit declines.
Reflecting such weakness, the World Trade Organization this week cut its forecast for trade this year to 2.8 percent from 3.3 percent. It acknowledged its new prediction may be ‘over optimistic.’
Such rates fall short of the 5 percent average of the past two decades. Also gone are the 1990s and early 2000s when trade grew twice as fast as economic growth – 2015 is set to be the fourth consecutive year in which the two expand around the same speed.

This post was published at David Stockmans Contra Corner on October 2, 2015.