During the postwar period, world trade grew a lot faster than global GDP as globalisation advanced. Between 1990 and 2007, global trade in goods and services grew at an average of 7% a year, says David Smith in The Sunday Times.
But it seems to be slowing: since then, growth has averaged just 4%. In the second quarter, growth fell to just 1.1%, the worst since the 2008 financial crisis (see chart), says the Netherlands Bureau of Economic Policy Analysis, which monitors trade in goods (not services).
Weakness in Europe and emerging markets hasn’t helped, and nor has China’s shift in emphasis from exports. Manufacturers are shortening their supply chains, bringing production closer to home, and the pace of globalisation has slowed: the latest round of trade talks at the World Trade Organisation has been going on for 14 years with no deal in sight.