Cross-border commerce has had the run of its life this past 2021. With year-over-year growth of over 10% - according to UNCTAD’s Global Trade Update report, released on 19 May - 2021 has been a record high year for international commerce.
Truth be told, most of the cross-border commerce was boosted by a combination of the pandemic backlash against local and traditional brick and mortar stores, and also the eCommerce boom that was already exploding since 2014, at least.
But, what key factors will define the near future of cross-border commerce? will this trend continue? Do we have to brace ourselves for a global economic recession - or rebound as some economists have already started to call it - that might stop or significantly reduce cross-border commerce? Let us find out some key factors that will define global cross-border commerce for 2022!
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Import and export trends for some of the world’s major trading economies show that with a few exceptions, trade recovered from the fall of 2020.
But keep in mind that this increase is perhaps more acute due to the low starting point of 2020.
All in all, China, India, and South Africa seem to be the countries that fare better during Q1 2021.
China’s exports, in particular, registered a strong increase not only from 2020 averages but also in relation to pre-pandemic levels. On the other hand, exports from Russia remained well below 2019 averages.
One of the things that this post-pandemic world is starting to show, is the fact that not all economies have the same resilience. Global cross-border commerce recovery has been remarkably uneven.
Especially among developing countries, with exports from East Asia rebounding substantially faster than other regions.
Precisely, it seems that East Asian economies are also behind the recovery of cross-border trade among developing countries.
The report shows that in Q1 2021 the value of exports remained below averages for countries with economies in transition, the Middle East, South Asia, and Africa. Although South America’s exports increased relative to Q1 2020, they remained below 2019 averages.
The United Nations report also shows that in Q1 2021 the value of merchandise - imports and exports - of developing countries was substantially higher compared with Q1 2020 and Q1 2019 (by about 16%).
Also, in Q1 2021 trade continued to rebound not only in sectors related to COVID-19, such as pharmaceuticals, communication, and office equipment, but also others like minerals and agrifood.
In contrast, the energy sector continued to lag behind and international trade in transport equipment remained well below averages, the report shows.
All in all, it seems cross-border will continue to grow globally, but at a very different pace depending on the region.
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