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Jakarta Post

With protectionism rising, have we hit peak trade?

  • Paul Donovan
    Paul Donovan

    Global Chief Economist of UBS Wealth Management

PREMIUM
London   /   Wed, June 20, 2018   /  01:29 pm
With protectionism rising, have we hit peak trade? Global trade today is almost 30 percent of the world economy, in real terms. This measure of globalization has doubled since 1990. (Shutterstock./File)

Global trade has surged over the past 25 years. People are trading with one another more than ever before. Global trade today is almost 30 percent of the world economy, in real terms. This measure of globalization has doubled since 1990. However, in recent years the growth of global trade has stalled. In particular, trade in goods (rather than trade in services, like wealth management) has stalled. In fact the world might have hit peak trade. How did global trade grow? Making things has become more complex. This helped the surge in global trade over the past 25 years. In the 1970s products tended to be made locally. A country would import some things it could not make itself. If a country does not have oil, it has to import oil (or use other sorts of energy). Oil and other basic goods aside, countries made their own things. Over the last 25 years, countries stopped maki...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.