Protectionism is costly and distortionary. New economic and political paradigms will lower trade barriers and reduce reliance on domestic demand. Increased regionalism and new bilateral and regional trade agreements will drive cross-border trade in new sectors.
The introduction of transformative technologies will dominate the global trade outlook. Digitalisation will make trade more efficient and transparent. Blockchain and fintech could help close the gap in trade finance. This could create a global trade super-cycle.
Geopolitics will drive the need for more bilateral trade to consolidate essential geostrategic ties, particularly for the major world economies. The need to protect countries' strategic interests and weaknesses in specific sectors will continue to be a decisive influence on the direction of trade.
The gap between trade in goods and trade stands to narrow. Services trade will expand significantly in developing economies, due to vast digital infrastructure improvements. This could see some markets transition from middle- to higher-income status.
High fuel and energy prices will have mixed impacts on cross-border trade, mainly benefiting exporters. High fuel prices impact shipping costs, contributing to backlogs across supply chains. This will mean continued upside price pressure.
The Future of Trade 2022 report presents the third iteration of the Commodity Trade Index, reassessing the performance of top trading hubs and comparing how the relative rankings have changed over time.
The USA is the top trading hub on the 2022 index, with a commodity index score of 58%.
This is 5% above the USA's score in the 2020 index when the country also took the top position. Meanwhile, the UAE stands in second place, with a score of 50%.
Restarting the manufacturing sector will be a top priority for key manufacturing hubs like China, Japan, India, Russia, Germany, Turkey, the UK, and the USA.
Trade could be further boosted within the Middle East, particularly in the pharmaceutical industry, if governments invested in R&D and encouraged local production through regulatory changes.
More than 11 billion tonnes of cargo were carried via sea in 2019, including vital food and medical goods, energy, raw materials, and manufactured goods. Despite the disruption of shipping-related services due to COVID-19, the digitization in maritime logistics boosted the ability to deliver essential port activities and meet market demands for essential items. The growth of maritime trade will continue over the years.
Oil exporters can expect to reap the benefits of higher global oil prices and positive COVID-19 developments, including higher vaccination rates across many economies.