THE volume and value of trading across the world are expected to go back to normal in 2022 after reaching record level last year, the United Nations Conference on Trade and Development (Unctad) said.
In its latest Global Trade Update, the UN committee said that the global trade value last year amounted to $28.5 trillion—showing growth of 25 percent from 2020 and 13 percent from 2019—due to a confluence of events brought about by the pandemic.
It noted that the “positive trend for international trade in 2021 was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages.”
The report added, “As these trends are likely to abate, international trade trends are expected to normalize during 2022.”
Unctad, in fact, sees trade growth losing its momentum in the first quarter of 2022.
This year, Unctad pointed out that global supply chains will continue reeling from the shipping bottlenecks and lack of certain input for production, among others.
“Logistic disruptions, a semiconductor shortage and rising energy prices have further contributed to supply shortages and spiraling shipping costs,” the UN agency said.
With this, Unctad said big firms have magnified efforts in “improving reliability and managing risks for their supply networks, but delays have persisted nevertheless.”
Another factor affecting global trade this year are the regionalization trends, it said, citing the Regional Comprehensive Economic Partnership (RCEP), which entered into force just last month.
RCEP is a free trade agreement among Asean countries and their trading partners including Australia, China, Japan, New Zealand and South Korea. This represents 30 percent of the global gross domestic product (GDP) or $26.2 trillion.
“This trade agreement facilitates trade among many of the East Asian and Pacific economies, and is expected to significantly increase trade between members, including by diverting trade from non-member countries,” Unctad explained.
While the Philippines is a signatory to RCEP, it has yet to participate as the country still awaits the Senate ratification of the trade deal.
Demand for the sustainable
In terms of products, Unctad projects more demand for those which are environmentally sustainable.
This could even be supported by government policies regulating the trade of high-carbon products, it said.
“Moreover, global trade patterns could also be influenced by increased demand of strategic commodities required to support greener energy alternatives,” Unctad said, citing cobalt, lithium and rare earth metals.
According to the Philippine Statistics Authority, the country’s total trade grew by 24.1 percent to $192.42 billion last year from $155.03 billion in 2020. Broken down, exports rose by 14.5 percent to $74.64 billion and imports increased by 31.1 percent to $117.78 billion for the period.