World exports 2013 – stagnates. As we see world equity markets bumping up to new recent highs and in some cases all time highs, what is fueling the advance? Global trade? Looking at the thumbnail chart we see that global trade is not surging at all, it is stagnating at best. One could even make the argument that it’s on the decline. Why is this?
As emerging economies struggle with high unemployment, many labor groups in these countries are calling for more and more trade restrictions – protectionism. However, there is a constant drip of how the G20 nations and other countries are committed to fight protectionism. When you Google for word “protectionism,” I am amazed at how many trade deals, trade talks and countries committing to fight protectionism, I find. You would think that protectionism is non-existent. But still world exports are slow. What is the real story on protectionism today?
The fact of the matter protectionism is on the rise. According to Global Trade Alert, the latest ranking of the world’s worst by protectionist measures : Argentina leads with 191; Russia, 172; US, 106; India, 101; and China, 100. The number of protectionist measures is actually increasing at a rate of 5 to 10% per year. Countries of course talk the talk but do not walk the walk. Global trade is flat due to the poor global growth prospects, so countries will have to look more inward for growth going forward. Another headwind for the global economy.
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