World trade slowing
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Interestign article in Today's times (no point linking, behind a paywall).
Restoring vibrant world trade is vital to driving global development BYLINE: George Magnus
Quote:Until 2008, world trade in goods and services had been a significant driver of prosperity, growing at just over twice the rate of world output. Over the previous 25 years, it had grown from 13 to 27 per cent of GDP in developed countries, and from 20 to 40 per cent of GDP in emerging economies. Trade is now rising only in line with or below world output.According to the independent CPB Netherlands Bureau of Economic Policy Analysis, the volume of world trade in May was more than 3 per cent lower than at the end of last year. Why has trade growth stalled?[…]
In a nutshell, one of the big trends of the 1990s and 2000s, the information technology-induced creation of global supply chains with back-and-forth trade in parts, has run its course.
So, info tech has lead to a faster turn over of capital and trade in parts, which has been displaced by development of local supply chains and lower input (chiefly energy) prices.
Quote:In the US, imports have been declining as a share of GDP, partly because fracking has slashed net energy imports. But the share of manufacturing imports in GDP has halved from 8 per cent in the decade before 2000. Softer consumption and in the future, a more pronounced reversal of outsourcing and a rise in local 3D printing production can be expected to affect trade patterns too.So, there is a general change coming. This I think is the killer line:
Quote:Because trade in services has held up better than trade in goods, because of modern production patterns and a technology-induced fall in relative prices, developed countries, which tend to have a much higher concentration of services, have done better than most emerging countries.Another way of putting this, is that financial capitalists are benefiting as profits flow to their relatively low labour intensive areas of industry, and virtual capital (and control of the physical infrastructure of world trade).
So, the TPP and TTIP agreements are deemed to be important to kick starting new trade rounds, but also re-arranging the political architecture of the world to match the increasinly concentrated capital holdings that are bursting out of national boundaries.
Actually, it's yesterday's Times (30 July). Too late if you've already bought today's on the strength of this recommendation !
http://blogs.channel4.com/paul-mason-blog/china-danger-open-currency-war/4217Paul Mason on China's devaluation and the ongoing (undeclared) currency war – take this as the context for Corbyn's People's QE, if all currencies are in freefall, then the risks are much less…
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