- Global and regional merchandise trade have faced significant downward pressure throughout 2019 and 2020. The emergence of the COVID-19 pandemic, coupled with increasing trade tensions and an already slowing global economy, have paved the way for the world’s worst economic performance since the Great Depression, with global international trade value estimated by ESCAP to dip by 14.5% in 2020.
- Despite facing a sharp decline in merchandise trade, Asia and the Pacific is expected to perform better than the rest of the world during 2020, with the most recent forecasts pointing to a lower export and import value contraction of 9.7% and 10.3%, respectively. As a result, the region’s prominence in global merchandise trade is expected to rise to an all-time high in 2020; 41.8% of the world’s exports and 38.2% of global imports are expected to come to or from Asia and the Pacific. This will be up from 39.9% and 36.9% in 2019.
- However, trade performances will be uneven across the region. Excluding China, developing economies will be hit the hardest by the current pandemic: their export and imports are expected to decline 15.8% and 17.1%, compared with 10.1% and 8.8.% for developed ones, respectively. The poorer trade performance of developing economies is closely linked with their weak ability to implement fiscal and monetary measures, their reliance on travel and tourism services, as well as their limited digital trade readiness.
- Of the Asia-Pacific region’s subregions, South and South-West Asia will post the worst overall trade contraction (21.6% and 21.4% fall in exports and imports, respectively). However, due to a sharp fall in oil prices, North and Central Asia will post the worst export performance (a 24.4.% decline). On the other hand, despite a better-than-average export performance, South-East Asia will face the largest import contractions (a fall of 22.1%). The Pacific will follow wider-regional trends with its exports and imports contracting 7% and 9.5%, respectively, while East and North-East Asia (mostly due to China’s trade recovery) will perform the best with a trade decline estimated at 5.5%.
- Looking at the available half-year statistics for sector-wise trade performances,trade in fuels and mining products have fallen the most, while agricultural products have performed the best. This is a result of the continued need of consumers for essential products and the steep decline in input demand. Manufactured goods have experienced roughly the same decline as total merchandise trade, pressured by a fall in final consumption of non-essential products, but boosted by heightened demand for medical equipment, pharmaceuticals, PPE as well as digital goods.
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