Asia-Pacific Economic Cooperation (APEC) economies need to keep an eye on the evolution of trade-related measures as merchandise trade volumes are expected post low growth rates this year amid the deceleration of the global economy.
APEC Policy Support Unit director Carlos Kuriyama and senior researcher Rhea Crisologo Hernando said trade facilitating measures have outnumbered trade-restrictive measures in recent years.
“However, the accumulation of the latter is cause for concern, particularly regarding export restrictions and bans. Furthermore, the number of trade remedies in force, mainly anti-dumping measures and countervailing duties, is growing,” they said in an APEC bulletin.
Kuriyama and Hernando said APEC economies could thus consider removing trade restrictions amid this challenge.
They said it is likely that merchandise trade volumes will post low growth rates in 2023 also due the ongoing geopolitical developments and increasing credit costs adversely affecting global demand.
APEC trade activity decelerated in 2022 from double-digit growth in 2021 as the momentum from a pandemic-related recovery dissipated and global demand weakened.
Merchandise trade volume in APEC expanded marginally by about 1.1 percent for exports and 1.2 percent for imports in 2022 compared to the level in 2021.
“Heightened global commodity prices, contractionary monetary policies to combat inflation, and disruptions in global value chains due to Covid-19 outbreaks contributed to the moderation in trade growth,” they said.
In contrast, strong recovery in trade in services is projected with the latest data on trade in commercial services in APEC painting a rosier picture.
“International tourism is leading this change towards full recovery as cross-border restrictions and quarantine requirements have been relaxed,” Kuriyama and Hernando said.
In the first three quarters of 2022, APEC trade in commercial services continued growing strongly by around 15 percent to $1.8T for exports, and 17.4 percent to $1.8T for imports relative to the same period in 2021, propelled mainly by transport and travel services.
Kuriyama and Hernando said growth has become slower and more uneven at a time of heightened uncertainty, stubborn inflation and other emerging risks.
“In addition, geoeconomic fragmentation could result in large output losses from lower foreign direct investment and trade flows, reduced employment opportunities and declines in productivity gains due to limited technology and knowledge transfers,” they said. “Changing demographics with aging populations becoming an economic burden could also affect economic growth, particularly in the medium and long term,” they added. – Press release