It’s a depressing time to be an advocate of free trade. For at least 30 years, governments around the world advocated greater openness in trade agreements. But globalisation peaked around a decade ago: flows of goods, services and capital relative to global output have either levelled off or fallen back, according to Capital Economics – and that trends looks is now accelerating further.
Global merchandise trade volume will slow to 1 per cent next year – a sharp decline from an earlier forecast of 3.4 per cent, according to the World Trade Organisation.
Trade will be weighed down by related shocks including the war in Ukraine, higher energy prices and monetary tightening, it said.