International merchandise trade in the G20 continued to drop in the fourth quarter of 2019. Exports contracted by 0.1% and imports fell by 1.3% compared with the previous quarter, putting them at their lowest levels in two years. Evidence of significant disruption to Asian supply chains related to the COVID-19 outbreak suggests that this downward trend is likely to continue into the first quarter of 2020, the OECD said, citing new data.
Data from the CPB World Trade Monitor, compiled by the Netherlands Bureau for Economic Policy Analysis, shows that the volume of internationally traded goods increased in December 2019 for the first time in six months following the easing of the US-China trade dispute. But this improvement is expected to be wiped out as the spread of coronavirus impacts the global economy.
All North American G20 economies saw international merchandise trade contract in the fourth quarter of 2019. Mexico was affected the most as exports declined by 3.4% and imports dropped by 3.2%, according to OECD data.
Lower imports to the US by 3.2% in the final quarter are partially responsible for the US goods goods and services trade deficit dropping for the first time in six years. Canada, meanwhile, recorded a 1.6% decline in exports and a 1.8% drop in imports.
In Asia, the ongoing Japan-Korea trade dispute continued to weigh on international trade, with exports and imports falling significantly in both countries – in Japan (by 3.4% and 3.6%, respectively) and in Korea (by 2.6% and 2.4%) – the OECD said. During the past two years, Korean exports dropped by 12.3% and its imports contracted by 8.0%.
Major European G20 economies fared a little better, with exports up in France (by 1.1%), Italy (1.0%) and, marginally, in Germany (0.2%). However, Germany’s international trade remains about 6% below recent highs.
In China, both exports and imports increased by 0.4% and 2.8%, respectively, while in India, exports grew by 2.8% but imports fell by 4.4%.
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