There is a close relationship between these two components, which has been greatly amplified with the process of globalization and the break-up of production chains across the planet. But even more, with globalization, international trade in goods has grown at a much higher rate than world GDP. To give some concrete figures: over the past 40 years, world GDP has increased fourfold, but international trade has increased sevenfold.
In a few words, how do you explain this greater increase in exchanges?
The main reason is the massive development of exports of intermediate goods, which are goods used in the production of other final products. These are, for example, electrical or electronic components, building materials, or even mineral products. Between 1980 and 2019, the share of this type of goods in world exports literally jumped, from 30% to 44%.
If this growth differential holds during a phase of economic expansion, we observe symmetrically a much faster reversal of world trade in a phase of slowdown or recession. This was observed during the global financial crisis of 2008 or more recently during the Covid-19 crisis in 2020, even if the latter is a special case due to the nature of the shock.
Will this relationship continue over time?
For the past 10 years, we have already observed a fairly pronounced slowdown in international trade in goods, which has resulted in a decline in the world GDP. A peak above 50% was reached in 2008, just before the financial crisis. While this decline could be partly explained by a resurgence of protectionist measures and a tendency for economies to turn inwards, the impact of which in itself is not obvious, a more obvious reason is to be found in the growing importance of exports of services such as information and communication, financial services and trade related to intellectual property. These services are set to expand significantly over the next few years, particularly as the digitization of activities spreads within companies.
