Look Who's Emerging Again

September 7, 2017

As we swing into the fall, exporters have a lot of issues to wrestle with. Top of the list is concern about the state of global trade, and the popular backlash to globalization. With NAFTA renegotiation is full swing, most are hoping for the best…but also considering opportunities in other markets. With CETA soon to be inked, eyes are on European possibilities. There are also rumblings about a future agreement with China, and the CEPA deal with India is still a possibility. Small wonder that there’s now more talk about trade diversification than I have heard for awhile. With growth picking up in the US, Europe and other OECD markets, is there any sign of a spillover into the emerging world?

One key signal is export performance. When the Great Recession blew in, export-dependent emerging markets were pummeled. China’s trade intensity – the sum of exports and imports as a share of GDP – went from almost 70 per cent to less than 50 per cent in a memorable two-year plunge. That would have been catastrophic for the economy had the government not stepped in with a very substantial stimulus package. What makes this shift far worse is that in the seven odd intervening years, it hasn’t changed. That chunk of GDP never came back. Not every emerging economy suffered as much as China, but they have collectively realized much slower growth in export activity in the post-2010 period.

Until recently, that is. Since late 2016, inflation-adjusted export activity across emerging markets has been somewhat more animated. With inflation-adjusted exports averaging growth in the 2-3 per cent range since 2012, year-on-year growth jumped through the first half of this year to 5 per cent. That’s still a far cry from the double-digit growth that was

This was excerpted from a 7 September 2017 commentary by Peter G. Hall of EDC.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
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