Trade

• [New] Global trade is projected to grow 4.7% over the next five years and 2.8% on average during the next two decades.
• [New] World dairy trade in 2020 is forecast to grow to 78 million tonnes (milk equivalent), up 1.5% year - on-year, nearly equal the average growth rate for the preceding five years.
• [New] More recently, in the first half of 2020, COVID-19-related disruptions to the local markets and trade, already adversely affected by the lingering impact of the prolonged conflict, provided further support, as did the lower imports due to the border screening implemented by the Government of Uganda.
• [New] The reduction in coal power generation capacity could be partly offset by a significant increase in the Czech Republic's renewable electricity generation capacity, adding 3.2 GW of new solar photovoltaics and wind by 2030.
• [New] Demand for shipping is expected to continue to grow in line with global economic growth over the next three decades.
• [New] Global trade is projected to fall disproportionately to GDP growth, both in 2020 and in 2021.
• [New] With an ambition to secure free trade agreements with countries 'covering 80% of UK trade' by 2022, the Department for International Trade is continuing its engagement with a number of existing EU trade partners.
• [New] Trade tensions aside, China's dairy demand is also expected to ease over the next decade as the rate of growth in per capita demand in that country slows.
• [New] Global coal trade in thermal and coking coal is now projected to decline by around 15% in the STEPS over the 2019-30 period.
• Economic activity in Australia's major trading partners is forecast to contract by 3% in 2020, and gradually recover in coming years - with growth of 6% in 2021 and 4% in 2022.
• The EU are predicting that a shift to WTO terms is expected to slow down recovery and that a future EU-UK trade agreement would mean a positive impact on economic activity from 2021.
• The unfavourable outlook for economic activity in the United Kingdom is a reflection of the weaker than expected GDP readings in the UK economy in 2020 Q2, still difficult epidemic situation, and the increased uncertainty about the conclusion of a trade agreement with the EU.
• The disruption caused by Covid-19 is expected to reach into next year with global economies, consumer demand and trading channels all impacted.
• The assumed move to WTO MFN rules for trade between the EU and the UK as of 2021 is another factor expected to dampen trade in goods and services.
• A trade agreement between the EU and the UK would exert a positive impact on economic activity in the EU from 2021, as compared to the forecast baseline of the UK and EU trading based on WTO Most Favoured Nation rules.
• The move to the new, significantly less beneficial EU-UK trading relations at the end of the transition period is expected to reduce trade and GDP growth in particular in 2021.
• Compared to the baseline of unchanged trading relations, the move to the WTO assumption is estimated to lead to a GDP loss of around 3/4% for the EU and euro area by the end of 2022, and to a loss of some 3% for the UK, with the increase in NTBs having a higher impact than tariffs.
• Global GDP is expected to contract by 3.8% in 2020 as the COVID-19 shock, containment measures, and increased uncertainty took a toll on global consumption, investment and trade.
• The contraction of global trade in the first half of the year is projected to be only partially mitigated by the bounce back in the second half of 2020.
• Global imports are forecast to grow by about 61/4% in 2021, before slowing to 4% in 2022, under the impact of protracted disruptions to global supply chains and accelerating de-globalisation trends.
• The falling remittances from Albanians working abroad should drive the widening of the current account deficit to a projected 11% of GDP in 2020, although the large decrease in imports improves the trade balance.
• The decline in global trade in 2020 is expected to be comparable to the Global Financial Crisis year in 2009, while the decline in global GDP in 2020 is expected to be more than twice as large.
• The bilateral deal largely preserves the terms under which the U.K. traded with Japan when it was part of the EU, but is expected to boost British trade by £15 billion and GDP by 0.07% over the next 15 years.

Last updated: 22 November 2020