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The Trade Numerologist: The Optimistic Case for Global Trade
23 April 2018
We've spent a lot of time
in this space of late talking about tariffs, protectionism, the
weakening of trade deals and the World Trade Organization, as risks
to the global economy.
But while a trade war,
particularly between the US and China, remains a potential
challenge, it also obscures a lot that is still going right these
days for shipping lines, ports, logistics firms and manufacturers
with global supply chains.
Consider this: In 2017,
total global trade increased to $16.7 trillion, up 9.8% from 2016,
when it was $15.3 trillion, according to the IHS Markit Global
Trade Atlas.
All the 2017 customs data
has been reported, and is now available in the Global Trade Atlas,
so we can also take a look at which countries are rising and
falling in the battle for global markets and opportunity.
Top 20 exporters,
2017 (Pct. change vs. 2016)
China $2.28 trillion (+7%)
US $1.55 trillion (+7%)
Germany $1.45 trillion (+9%)
Japan $698 billion (+8%)
Netherlands $652 billion (+14%)
Hong Kong $550 billion (+6%)
France $535 billion (+7%)
South Korea $574 billion (+16%)
Italy $506 billion (+10%)
UK $446 billion (+6%)
Belgium $430 billion (+8%)
Canada $421 billion (+8%)
Mexico $409 billion (+10%)
Singapore $373 billion (+13%)
Russia $357 billion (+25%)
Spain $320 billion (+10%)
Switzerland $299 billion (-1%)
India $297 billion (+12%)
Taiwan $292 billion (+14%)
Thailand $236 billion (+10%)
Among the top exporters,
Russia (+25%), South Korea (+16%), Netherlands (+14%) and Singapore
(+13%) had the biggest increases in 2017. Russia benefitted from
increases in demand and prices for oil and gas, as its fuel exports
rose 28% to $173.3 billion from $134.9 billion. In particular,
Moscow has been forging tighter trade links with China, while
continuing to export massively to the European Union.
Top destinations
for Russian exports, 2017
China $38.9 billion
Netherlands $35.6 billion
Germany $25.7 billion
Belarus $18.4 billion
Turkey $18.2 billion
Italy $13.8 billion
South Korea $12.3 billion
Kazakhstan $12.3 billion
Poland $11.6 billion
US $10.7 billion
South Korea was helped by
rising demand for its cars, TVs and electronics, while Singapore
and the Netherlands benefitted from the strength of the global
trade.
Looking at the long-term
trends, it's remarkable how little has changed, except for the rise
of China. Since 2000, it's climbed to first from seventh. South
Korea has replaced Canada in the top ten. Otherwise, nine of the
ten countries in the top ten are still the same as in 2000.
Top 20 exporters,
2000
US $780.4 billion
Germany $549.9 billion
Japan $479 billion
France $326.5 billion
UK $284.4 billion
Canada $278 billion
China $249.2 billion
Italy $239.7 billion
Netherlands $232 billion
Hong Kong $202.7 billion
Belgium $187.8 billion
South Korea $172.3 billion
Mexico $166.4 billion
Taiwan $147.6 billion
Singapore $137.7 billion
Spain $114.9 billion
Malaysia $98.2 billion
Russia $87.7 billion
Sweden $86.8 billion
Switzerland $80.4 billion
The world's biggest
exporters are also its largest economies, but the list of top
exporters includes smaller nations, like Netherlands, Belgium or
Singapore. Their prosperity is another sign of the robust health of
global trade.
Small countries with
relatively high amount of exports typically have major world-class
ports or manufacturing facilities located in special industrial
zones, often with tariff and tax exemptions. These hubs are
essential to the smooth functioning of global trade.
To figure out which nations
are most dependent on trade, let's divide total exports by gross
domestic product for the top 20 exporting countries, as measured by
the International Monetary Fund. To make it easier to read, we'll
multiply by 100.
Call the result "Trade
Points", a measure of a place's reliance on exports.
Hong Kong, a territory of
7.3 million that is controlled by China but administered separately
under a "one country, two systems" philosophy, is still one of the
biggest ports in the world, and a key transit point for exports
from the mainland. It has the most Trade Points, with 164.
The US scores only 8, and
China 19. Despite all the fireworks, the two economic superpowers
are less reliant on exports than one might think by reading the
headlines, and well situated to survive a trade war, especially
given the size of their internal markets and service economies.
Germany, the world's third
biggest exporter, has 40 points, suggesting that, among
industrialized economies, it has the most to lose from a trade
war.
Most Trade Points
among top 20 exporting countries, 2017
Hong Kong 164 points
Singapore 122 points
Belgium 87 points
Netherlands 79 points
Thailand 54 points
Taiwan 51 points
Switzerland 44 points
Germany 40 points
South Korea 38 points
Mexico 37 points
These export-reliant
countries, the key lubricants of global trade, have mostly stayed
out of the recent protectionist fray, another reason to suspect
that while the global economy faces a number of risks, it's
possible that trade, in the end, will turn out not to be one of the
biggest.
What topic would you like
the Trade Numerologist to cover? Email tradenumerologist@gmail.com
with comments and questions.
The Trade Numerologist is
the IHS Markit unique weekly look at global trade by award-winning
journalist John W. Miller, formerly of the Wall Street Journal,
using proprietary numbers from the IHS Markit Global Trade Atlas
database, the world's most complete and accurate set of trade
numbers.