Globalization's Reality - World Trade Has Increased By Less Than 1% Annually In The Last Decade

Tyler Durden's picture

Submitted by Eric Bush via Gavekal Capital blog,

There are fears that the world is on the precipice of turning back the clock on globalization. In some ways, the case can be made globalization has been retreating since the financial crisis.

One of the strongest supporting data points of that argument is world trade data.

According to the CPB World Trade Monitorthe value of world exports (volume * price) has increased by less than 1% annually since making a high on 7/31/2007 compared to more than a 5% annualized growth rate since 1991 (beginning of the data series).

If we look at just volume data, the story doesn’t improve very much.

World export volume has increased at less than 1.5% annually since 7/31/2007. This is about 1/3 of the annual growth rate world export volumes has increased by since 1991.

Even with extraordinary global monetary easing in the post financial crisis world, world trade has been unable to find the extra gear it hit during the pre-crisis era.

* * *

So next time the mainstream media, economists, and liberal left blame Trump for collapsing world trade, let's look in that rear-view mirror of reality... and see what global trade did during Obama's "free trade is awesome" reign.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
NumNutt's picture

Death to Globalization!!!

tmosley's picture

Globalists aren't interested in more trade. They are interested in unlimited, centralized power.

38BWD22's picture

 

 

I can only speak for myself and our little bearing importer there in Peru.

We have imported (all from Asia (Korea, China, Japan), the Americans won't sell to us) at a growth rate averaging about 5% per year (netting it all out, inc. our fairly lousy 2016).

The Saint's picture
The Saint (not verified) NumNutt Jan 21, 2017 11:58 AM

It's because the Community Organizer didn't have a clue what he was doing.  We need FAIR Trade not FREE Trade.  Make it fair and the world will chomp at the bit to make it work.

 

invest-in-bullion's picture
invest-in-bullion (not verified) NumNutt Jan 21, 2017 12:12 PM

I'm ready for it! I've all my money in Gold!

silver surfer's picture

What happened;

Rich countries got rich by building and protecting their own domestic industries. In addition they where colonial powers, and could prohibit industrialisation in the colonies, and thereby keeping them poor by only letting them produce commodities for export. This is why they promote the Richaridan view of comparative advantage.

Poor countries end up specialising in being poor, aka banana republics.

Britain did this until the second world war, and the United States of America did this until the 1980s, Germany, Japan did this, China and the asian tigers did this, and they are now the new preachers of free trade and globalisation.

This is why multinational companies, and the globalist political elites fight for their cultural and economic hegemony by promoting classical economic deceptions.

Jack's Raging Bile Duct's picture

I think you're underestimating the significance of the first and second industrial revolutions which occurred almost exclusively in Europe and North America.

You had one group of societies breaking the boundaries of chemistry, physics, and yes, automation--while the others stayed in the middle ages. That's more significant than any sort of protectionist policies.

silver surfer's picture

I think industrial and protectionist policies started long before the first industrial revolution, in the city states of Europe (Venice) and so forth. I do not think i underestimate the importance of the industrial revolutions att all. The industrial revolutions just made these kind of policies even more effective in my opinion.

Development economics is a big field and not easy to generalise. However a massive new book about alternative theories of economic development has just been released with contributions from 40 different spesialists that might be of interest. see

Handbook of Alternative Theories of Economic Development
Ignatius's picture

Has anyone pointed out that the single most polluting entity on the planet is likely a freighter burning bunker fuel?  And yet we are expected to cheer globalization and the expansion of "free trade" (it isn't, it's off-shoring).  Where are the climate pimps on this?

The Saint's picture
The Saint (not verified) Ignatius Jan 21, 2017 12:02 PM

You are right.  I hadn't considered that before.

38BWD22's picture

 

 

@ ignatius

Ocean maritime ships are extermely efficient in using fuel to move freight.  Almost all other forms of transportation use far more fuel.

Ignatius's picture

I'm sure they are efficient, but that's not my point. 

My point is they pollute like motherf#ckers carrying freight that could be produced locally.

hxc's picture

Sure, but if that were the better way to do it, people would already be doing it that way. Not arguing for globalization, just the value of market-dricen resource allocation

UnschooledAustrianEconomist's picture

For sure you get your lamb steak from Down Under cheaper by ship than by plane.

But the point is, do you really need some freaking lamb steak from Down Under?

Bopper09's picture

It's like walgreen's protesting the 'oilsands', when the entirety of the western oilsands puts out a fraction of the emissions that their chain of superstores that use air conditioners / fridges / transportation 'emmisions' do.  But keep up the good fight, you fucking hypocrits.

curbjob's picture

Fuck the climate pimps, where are the mathematicians  ?

The US population has grown by an average of  0.78% over the last 10 years.

Just exactly how much should trade outstrip population growth by, you stupid fucking exponential growth to the moon motherfuckin cunt ?

Jesus, I can almost taste the blood as I pull this cunts teeth from my forehead. 

moorewasthebestbond's picture

1% real growth?

 

The Russians tanked it.

rosiescenario's picture

Trade is the cover story used by the globalists. Power over others is what their real goal is.

Nobodys Home's picture

Trade you say? Okay. I'll trade you a gun in your face and a boot on your throat for everything you produce over the minimum needed for you to survive.

Putrid's picture
Putrid (not verified) Jan 21, 2017 12:14 PM

I couldn't give a shit. Trade between China and Indonesia increased hugely; I alongside 100s of millions of Chinese people breathed in the result last week: a blanket of toxic smog that stretched for 100s of miles in Central China.

The Chinese were buying low grade coal from Indonesia because it was cheaper than local coal that's cleaner. That's the hidden hand for you true believers out there.

Putrid

Uncertain T's picture

Cue Paul Krugman .... Need more windows broken globally. 

edifice's picture

"Trade" means less goods coming out of China, to the rest of the world. Less paper coming out of the West, to China.

beijing expat's picture

It was only ever about lining the pockets of the Oligarchy at your expense. Anyone can figure that out.

jm's picture

Globalism has always been mostly about cheap labor deployed with capital to maximize profits. Labor will be replaced by capital outlay in ten years or so, so nobody needs cheap labor.

Capital doesn't need refugees that will become permanent welfare recipients in generational slums when Work is automated.

Capital needs legal infrastructure security and property rights,

The goons in the press are too stupid to realize that the nationalism they despise is merely a prescient understanding of how the world is changing, garbed in a sound byte.

Read Ernst Junger. He figured it all out nearly a century ago, sadly or not.

Cardinal Fang's picture

Its not quantity, its quality.

Thank God, we offshore all our manufacturing to China, I was getting tired of all my appliances lasting 20 years...

Of course, the Maytag repairman still has nothing to do because we don't fix anything we just buy another cheap piece of shit.

small axe's picture

no wonder the percentage stolen by the ultra-elite has skyrocketed -- they need to maintain their standard of living.

Makes perfect sense now.

Pissedman's picture

This proves that the economy is a zero sum and the pie is not growing.  So any gains are offset by losses somewhere else.  

Ryan Langemeyer's picture

"There are fears that the world is on the precipice of turning back the clock on globalization." 

So I thought..... who fears turning back globalism? I don't know anyone who fears that. Most of the folks that I know are happy that globalism is "on the precipice"!

I mean, who wants to by more cheap Chinese shit that immediately falls apart?


besnook's picture

intuitively this sort of proves that most global trade was labor arbitrage, commodities and a little bit of comparative advantage, the reason given for global trade according to krugman.

two hoots's picture

They now try giving money and cheap debt to select people thinking it will somehow stimulate  our highly developed economy?  Likely works in the third world but not here.

We've gone past silly.

UnschooledAustrianEconomist's picture

Peak Globalization, bitchez!

And the paid fools keep on singing the hymn on its inevitable and godgiven character. Morons and idiots.

Stan Smith's picture

I agree with the quality not quantity mentioned on the thread.    

I've lived in my current house 10 years.    We've replaced 3 dishwashers.    Our previous housing was for 7 years, we never replaced a dishwasher.    One was made in the USA.   The others in China or Vietnam.    I dont think I need to tell you which was which.

In hunting down our most recent dishwasher,  I asked an appliance repairman friend of ours what brand he'd recommend.    His answer was telling, but not surprising.   He said they are all SHIT now, and that there are 5 or 6 companies in China and Korea that make ALL the parts for things sold here.   While we end up getting a Kenmore because of some "points" my wife had at Sears,  he recommended a Samsung washer... not because it was great,  but the replacement parts for Samsung we're about 40% less than on most other brands.   

As he pointed out,  they arent designed to last that long anymore,  and if your going to need to replace parts,   you might as well save money doing it.

This probably applies to 75% of the manufactured goods out there.    Im not under any disillusions that Donald J. is going to reverse this trend.   He might help keep some of that here though.   We'll see.

besnook's picture

that is why i only buy used appliances. i am not going to spend a thousand dollars for a washer dryer set that will break down in 5 years or less. i'll spend a coupla hundred dollars and fix(myself) whtever ever goes wrong if the part only cost a few bucks. that goes for lawn mowers, refrigerators and cars, too. my coffee grinder was built in 1934 and has already lasted longer than the last 3 new ones i bought.

Kprime's picture

I tried to buy a replacement handle for a flat nosed shovel.  the handle was 14.95.  a whole brand new shovel was 15.95.  I don't know what this means.

adr's picture

The global economy has gone nowhere. 

The global cental bank counterfeiting went exponential causing stock multiples to follow. 

Real sales and earnings have been declining for a decade. The 2008 crash never stopped. Sooner or later the stock market will wake up and it will be a long way down followed by full Zimbabwe. 

Duc888's picture

 

 

Any facts or figures on how much global trade was completed in the last ten years in "other than dollars"?