These 3 charts show how international trade works - and the current state it’s in
www.weforum.org
With unfinished goods, components and services now accounting for 70% of all trade, emerging markets such as the BRIICS countries – comprising Brazil, Russia, India, Indonesia, China and South Africa – are the largest beneficiaries of this development, their share of total global trade rocketing in
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Summary
🌍 International trade is increasingly driven by unfinished goods, components, and services.
📈 Emerging markets like the BRIICS countries are benefiting the most from this trend.
💰 These countries offer lower wages, ample land, and supportive governments for manufacturers.
📉 The share of global trade for these emerging markets has been rapidly increasing.
🌱 This shift in trade dynamics has significant implications for global economic growth.
Top Highlights
- With unfinished goods, components and services now accounting for 70% of all trade, emerging markets such as the BRIICS countries – comprising Brazil, Russia, India, Indonesia, China and South Africa – are the largest beneficiaries of this development, their share of total global trade rocketing in recent years.
- The lower wages, plentiful land and accommodative governments found in these countries provide manufacturers with a source of low-cost production.
- For that reason, they are vulnerable to political manipulation to protect particular domestic industries or to put pressure on other nations. The threat of non-tariff barriers – which include quotas on imports and subsidies to make local producers more competitive than foreign imports – and tariffs can change patterns of trade.
- Protectionist measures like these often have unintended consequences and create geopolitical friction. To guard against that, and to maximize the benefits of exchanges with favourable partners, multilateral trade agreements have flourished since World War II.
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