‘Hard Brexit’ is the best way to fight global protectionism”
– Liam Halligan, The Telegraph, 1st October, 2016
International commerce is stalling. The growth in worldwide exports of goods and services is this year set to fall below the expansion of global GDP for the first time in 15 years. That’s because myopic politicians, ignoring the lessons of history,are succumbing to the siren calls of protectionism. The global economy is becoming more insular.
The World Trade Organisation, the most important trade body on earth, just slashed its 2016 forecast for the increase in total international commerce from 2.8pc to 1.7pc – well short of its 2.2pc estimate for the growth of the world economy as a whole.
This will mark the first time the share of trade in global economic activity has fallen since 2001 – the year in which terrorist atrocities in New York led to a lock-down on inter-continental travel and financial flows, bringing cross-border commerce to a shuddering halt. Actual trade volumes are set to fall this year to their lowest level since 2009, the epicentre of the global financial crisis.
This worrying trade slowdown is partly because, across the world, investment is sluggish and corporate debt is high and rising. Despite years of low interest rates and central bank money-printing – or perhaps because of them – countless businesses, large and small, are delaying international ambitions, as financial markets remain on edge.
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