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31 March 2021  
(21-2673) Page: 1/10 
    
 
PRESS RELEASE  
E M B A R G O  
N O T  F O R  P U B L I C A T I O N  O R  D I S T R I B U T I O N  B Y  N E W S  A G E N C I E S  U N T I L  
17. 0 0 H G E N E V A  T I M E  3 1  M A R C H  2 0 2 1  
 
TRADE STATISTICS AND OUTLOOK  
World trade primed for strong but uneven recovery after  
COVID -19 pandemic shock  
Prospects for a quick  recovery in world  trade have 
improved as merchandise trade  expanded more 
rapidly than expected in the second half of last 
year. According to new estimates from the WTO, 
the volume of world m erchandise trade  is expected 
to increase  by 8.0% in 2021  after having fallen  
5.3% in 2020 , continuing its rebound from the 
pandemic -induced collapse that bottomed out in the 
second quarter  of last year . 
Trade growth should then slow to 4.0%  in 2022,  
and the effects of pandemic  will continue to be felt 
as this pace of expansion would  still leave trade 
below its pre -pandemic  trend (Chart 1).  
The relatively positive short-term outlook for global 
trade is marred by regional disparities, continued 
weakness in services trade , and lagging vaccination 
timetables , particularly in poor countries.  COVID -19 
continues to pose the greatest threat  to the outlook 
for trade , as new waves of infection could easily 
undermine any hoped -for recovery.  
"The strong rebound in global trade since the 
middle of last year has helped soften the blow of 
the pandemic for peopl e, businesses, and 
economies ," WTO Director -General Ngozi 
Okonjo -Iweala  said. "Keeping international markets 
open will be essential for economies to recover  from 
this crisis  and a rapid, global and equitable vaccine 
roll-out is a prerequisite for the stron g and 
sustained recovery we all need."  MAIN POINTS  
• World merchandise trade volume is 
expected to increase by 8.0% in 2021  
after falling 5.3% in 2020, a smaller 
decline than previously estimated.  
• Trade growth will likely slow to 4.0% 
in 2022,  with the total volume of global 
trade remaining below the pre -
pandemic trend.  
• World GDP at market exchange rates 
should increase by 5.1% in 2021 and 
3.8% in 2022, after contracting by 3.8% 
in 2020.  
• Merchandise trade in nominal dollar 
terms fell in 2020 by 7%  while 
commercial services exports declined 
by 20%.  
• Falling oil prices led to a 35%  
contraction in trade in fuels in 2020.  
• Travel services were down 63% in 2020  
and are not expected to fully recover 
until the pandemic wanes.  PRESS/ 876 
 
- 2 - 
 
  "Ramping up production of vaccines will allow businesses and schools to reopen more quickly and 
help economies get back on their feet . But as long as large numbers of people and countries are 
excluded from sufficient vaccine access, it will stifle growth, and risk reversing the health and 
economic recovery worldwide," she said.  
 
The Director -General added that trade through value chains has helped countries access food and 
essential medical supplies during  the crisis.  
 
"Manufacturing v accines requires  inputs  from many different countries. One leading COVID -19 
vaccine includes 280 components sourced from 19 different countries," she said. "Trade 
restrictions make it harder to ramp up production . The WTO has helped keep trade flowing during 
the crisis . Now, the international community must leverage the power of t rade to expand access to 
life-saving vaccines."  
 
Chart 1: World merchandise trade volume, 2015Q1 -2022Q4  
Index, 2015=100  
 
 
Source s: WTO and UNCTAD for trade volume data; WTO for forecasts.  
 
Short -term risks to the forecast are firmly on the downside and centred on pandemic -related 
factors. Th ese include insufficient production and distribution of vaccines, or the emergence of 
new, vaccine -resistant strains of COVID -19. Over the medium -to-long term, public debt and 
deficits could also weigh on  economic growth and trade, particularly in highly indebted developing 
countries.  
 
The forecast illustration in Chart 1 shows two alternative scenarios for trade. In the upside 
scenario, vaccine production and dissemination would accelerate, allowing cont ainment measures 
to be relaxed sooner. This would be expected to add about 1 percentage point to world GDP 
growth and about 2.5 percentage points to world merchandise trade volume growth in 2021.  Trade 
would return to its pre -pandemic trend by the fourth quarter of 2021.  In the downside scenario, 
85.090.095.0100.0105.0110.0115.0120.0125.0
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
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2017Q1
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2017Q3
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2018Q1
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2019Q1
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2020Q1
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2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
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2022Q4
Merchandise trade volume Trend 2011-2019
Upside scenario Downside scenario
Baseline forecastPRESS/ 876 
 
- 3 - 
 
  vaccine production does not keep up with demand and /or new variants of the virus emerge  against 
which vaccines are less effective . Such an outcome could shave 1 percentage p oint off of global 
GDP growth in 2021 and lower trade growth by nearly 2 percentage points.  
 
For the whole of 2020 , merchandise trade was down 5.3%  (Table 1) . This drop is smaller than 
the 9.2% decline  foreseen in the WTO's previous  forecast in October 20 20. The better than 
expected performance  towards the end of the year can partly be explained by the announcement 
of new COVID -19 vaccines in November, which contributed to  improved  business and consumer 
confidence . Box 1 below discusses reasons for the for ecast upgrade in more depth.  
 
The volume of world merchandise trade plunged 15.0% year -on-year in the second quarter 
of 2020 (revised up from -17.3 % in October)  as countries around the world imposed  lockdowns 
and travel restrictions to limit the spread of COVID -19. Lockdowns were eased in the second half 
of the year as infection rates came down, allowing  goods shipments to surge back to near 2019 
levels by the fourth quarter.  
 
Faster trade and outpu t growth in the second half of 2020 was supported by major government 
policy interventions , including significant fiscal stimulus measures in the United States . These 
measures boosted household incomes and supported continued spending on all goods , includi ng 
imports . In addition , many businesses and households adapted to the changing circumstances, 
finding innovative ways to sustain economic activity in the face of health -related restrictions on 
mobility. Effective management of the pandemic limited the ext ent of the economic downturn  in 
China and other Asian economies , allowing the m to continue importing . These actions  helped prop 
up global demand  and may have prevent ed an even larger trade decline . 
 
Trade in nominal US dollar terms fell even more sharply than trade in volume terms in 2020. 
World merchandise export  values  were down 8% compared to the previous year , while commercial 
services receipts tumbled  20%. Services trade was especially weighed do wn by international travel 
restrictions , which  prevented the delivery of services requiring physical presence or face-to-face 
interaction .  
 
The impact of the pandemic on merchandise trade volumes differed across regions  in 2020, with 
most regions recordin g large declines in both exports and imports (Table 1). Asia was the sole 
exception, with export volume s up 0.3% and import volume s down a modest  1.3%. Regions rich in 
natural resources  saw the largest  declines  in imports , including  Africa ( -8.8%), South America 
(-9.3%) and the Middle East ( -11.3%), probably due to reduced  export revenues as oil prices fell 
around 35%. In comparison to other regions , the decline  in North American imports was relatively 
small ( -6.1%). 
 
In 2021 , demand for traded goods  will be driven by North America (11.4%) thanks to large  fiscal 
injections  in the United States , which  should  also stimulate other economies through the trade 
channel.  Europe and South America will both see import growth of around 8%, while other regions 
will register smaller increases.  
 
Much of global import demand will be met by Asia, exports from which are expected to grow by 
8.4%  in 2021 . European exports will increase nearly as much (8.3 %), while shipments from North 
America will see a smaller rise (7.7%). Strong forecasts for export growth in Africa (8.1%) and the 
Middle East (12.4%) depend  on travel expenditure s picking up over the course of the year , which 
would strengthen  demand for oil . Meanwhile, South America will see weaker export growth 
(3.2%), as will the Commonwealth of Independent States (CIS), including certain former and 
associate Members (4.4%).  PRESS/ 876 
 
- 4 - 
 
    BOX 1: WHY TRADE AND OUTPUT DECLINED LESS THAN FEARED AT THE START OF THE 
PANDEMIC  
In April 2020, when over half the global population was under lockdown orders, the sheer 
extent of pandemic -related uncertainty led the WTO's trade forecast to explore two distinct 
scenarios for how COVID -19 would impact global trade: (1) a relatively optimistic scenario, with 
a sharp drop followed by a rec overy starting in the second half of 2020, and (2) a more 
pessimistic scenario with a steeper initial decline and slower recovery. It quickly became 
apparent that the optimistic scenario was the one actually unfolding, which the WTO 
announced in June 2020.  Yet even this scenario overstated the extent of the decline: the initial 
April estimate of -12.9% was revised upwards to -9.2% by October. The final decline was -5.3%. 
Similarly, the IMF's projected decline for world GDP at market exchange rates in 2020 w ent from 
-6.1% last June to -4.7% in October, and finally to -3.8% in January 2021.  
What accounts for the smaller -than -expected contractions in growth and trade?  
Strong monetary and fiscal policies by many governments were probably the biggest factors. 
Much greater in scale and geographic coverage than the response to the 2008 -09 global 
financial crisis, these policies helped prevent a larger drop in global demand,  which would have 
reduced trade further. Fiscal policy in particular boosted personal incomes in advanced 
economies, allowing some households to maintain relatively high levels of consumption, and 
supporting more exports than would otherwise have been the case.  
Lockdowns and travel restrictions caused consumers to shift spending away from non -traded 
services and towards goods. Innovation and adaptation by businesses and households kept 
economic activity from falling even more. Manufacturing supply chains we re able to resume 
operations, and many people shifted to working remotely, generating income and demand. 
Finally, trade policy restraint by WTO members prevented protectionism from strangling world 
trade. As WTO monitoring has documented, many restrictive trade measures imposed at the 
start of the pandemic were rolled back, and new liberalising measures were introduced. Despite 
continuing challenges, notably around vaccine trade, the multilateral trading system kept trade 
flowing and prevented worse outcome s, as members were restrained by commitments and 
economic self -interest. As during the global financial crisis, the foundation of the system proved 
sound.  PRESS/ 876 
 
- 5 - 
 
  Table 1: Merchandise trade volume and real GDP, 2017 -2022a 
Annual % change  
  2017 2018 2019 2020 2021P 2022P  
       
Volume of world merchandise tradeb 4.9 3.2 0.2 -5.3 8.0 4.0 
Exports        
North America  3.4 3.8 0.3 -8.5 7.7 5.1 
South Americac 2.3 0.0 -2.2 -4.5 3.2 2.7 
Europe  4.1 1.9 0.6 -8.0 8.3 3.9 
CISd 3.9 4.1 -0.3 -3.9 4.4 1.9 
Africa  4.7 2.7 -0.5 -8.1 8.1 3.0 
Middle East  -2.1 4.7 -2.5 -8.2 12.4 5.0 
Asia 6.7 3.8 0.8 0.3 8.4 3.5 
Imports        
North America  4.4 5.1 -0.6 -6.1 11.4 4.9 
South Americac 4.5 5.4 -2.6 -9.3 8.1 3.7 
Europe  3.9 1.9 0.3 -7.6 8.4 3.7 
CISd 14.0 4.1 8.5 -4.7 5.7 2.7 
Africa  -1.7 5.4 2.6 -8.8 5.5 4.0 
Middle East  1.1 -4.1 0.8 -11.3 7.2 4.5 
Asia 8.4 5.0 -0.5 -1.3 5.7 4.4 
       
World GDP at market exchange rates  3.3 3.0 2.4 -3.8 5.1 3.8 
North America  2.3 2.8 1.9 -4.1 5.9 3.8 
South Americac 0.8 0.2 -0.7 -7.8 3.8 3.0 
Europe  2.8 2.0 1.5 -7.1 3.7 3.6 
CISd 2.3 2.9 2.1 -0.5 1.0 1.2 
Africa  3.1 3.1 2.9 -2.9 2.6 3.8 
Middle East  0.7 0.5 0.1 -6.0 2.4 3.5 
Asia 5.1 4.6 4.1 -1.1 6.1 4.1 
              
 
a Figures for 2021 and 2022 are projections.  
b Average of exports and imports.  
c Refers to South and Central America and the Caribbean.  
d Refers to Commonwealth of Independent States (CIS), including certain associate and former 
member States.  
 
Source:  WTO for trade, consensus estimates for GDP.  
Detail s on trade statistics  
The charts in this section illustrate annual and quarterly WTO trade statistics in greater detail and 
highlight certain noteworthy trade -related indicators.   
 
Chart 2 below  shows quarterly merchandise export and import volume  indices  by region  for 2015 
to 2020 , plus projections  for 2021 and 2022 . In the second  quarter of 2020, North America and 
Europe saw sharp year-on-year declines  in export volumes , down  25.8% and 20 .4% respectively. 
By the fourth  quarter  these regions had recovered much of their lost ground , with respective year-
on-year declines  of just 3.0% and 2.4%. Middle Eastern exports also fell precipitously  in the 
second quarter  as oil consumption slumped  worldw ide due to restrictions on international and 
domestic travel.  
  
Asian exports  saw a much  small er decline  of 7.2% in the second quarter , but by the fourth quarter 
they were up 7.7%  compared to the previous year . Their rapid recovery can be explained by the PRESS/ 876 
 
- 6 - 
 
  relatively small impact  that COVID -19 had on certain  Asian economies , and by the fact that the 
region  has been supplying the world with consumer goods and medical supplies during  the 
pandemic , driving  up regional  export  totals . 
 
In the forecast periods we see a divergence between regions with faster and slower trade growth.  
On the import side, Africa, South America and the Middle East will continue to see their 
merchandise trade stagnate while other regions will pull ahead . On the export side , most regions 
will only see modest gains while Asia continue s to supply large quantities of  goods to global 
markets . 
 
Chart  2: Merchandise exports and imports by region, 2015Q1 -2022Q4  
Volume index, 2015=100  
 
a Refers to South and Central America and the Cari bbean.  
b Refers to Commonwealth of Independent States, including certain associate and former member 
States.  
 
Source:  WTO and UNCTAD.  
 
Chart 3  illustrates the quarterly evolution of merchandi se trade  in current US  dollar  terms  over the 
course of  2020. It indicates  that the value of world trade in manufactured goods  was 6% higher in 
the fourth quarter  of 2020 than in  the same period of the previous year . This resurgence  may be 
attributable  to the resumption  of factory operations  in alignment with safety measures required to 
protect workers from COVID -19. Trade in a gricultural products was up by a similar amount over 
the same period. In contrast, the value of Fuels and mining products  trade was still down 19% in 
the fourth quarter . The value of merchandise trade  overall was up slightly compared to the 
previous year (2%), but this increas e might  be exaggerated due to  the fact that world trade was 
already slowing in the fourth quarter of 2019, before the pandemic.  
 
708090100110120130140Exports
North America South America a Europe
CIS b Africa Middle East
Asia708090100110120130140Imports
North America South America a Europe
CIS b Africa Middle East
AsiaPRESS/ 876 
 
- 7 - 
 
  Chart 3: Year -on-year growth in world merchandise trade, 2020Q1 -2020Q4  
% change in US$ values  
 
Source:  WTO estimates.  
Most categories of manufactured goods saw significant gains  in the second half of 2020.  This is 
illustrated by Chart 4 , which shows monthly and quarterly year -on-year growth in the US dollar 
value of world trade by sector . World t rade in Iron and steel was down 17% in the third quarter, 
but this decline was reduced to 2% by the fourth quarter. Iron and steel  trade  is indicative of 
broader economic conditions as these products are heavily used  in both automobile manufacturing  
and building construction , both of which were hit hard  by the pandemic.  
 
Strong growth in textiles trade in both the third and fourth quarter  probably reflects high demand 
for medical face coverings, which is included in this category . Electronic goods  including  computers 
also saw steady growth of 12% in the second half of 2020 , reflecting strong demand as 
households  and busin esses upgraded equipment to facilitate  working remotely .  
 
Chart 5 shows year -on-year changes in world commercial services trade by major category. For 
the whole of 2020, Travel and Transport services were down 63% and 19%, respectively. 
Meanwhile, the cat egory Other commercial services (including financial services and computer 
services) held up well, falling only 2%. Finally, Goods -related services fell 13%. Transport and 
Travel services were directly impacted by containment measures designed to limit the  spread of 
COVID -19, many of which remain in place or have been tightened in response to the resurgence of 
the disease.  
 
Detailed quarterly and annual statistics on merchandise and commercial services trade can be 
downloaded from the WTO’s online data portal at data.wto.org . A statistical supplement showing 
country ranks and shares in world trade can be downloaded here. 
 
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Total merchandise Agricultural
productsFuels and mining
productsManufacturesQ1 2020 Q2 2020 Q3 2020 Q4 2020PRESS/ 876 
 
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  Chart  4: Year -on-year growth in world manufactured goods trade, 2020Q3 -2020Q4  
% change in US$ values  
 
 
Source:  WTO estimates.  
 
Chart 5: Year -on-year growth in world commercial ser vices trade, 2020Q1 -2020Q4  
% change in US$ values  
 
Source : WTO-UNCTAD -ITC estimates.  
High frequency trade indicators  
The WTO has been tracking timely, high -frequency trade -related indicators during the pandemic to 
better understand current  trends in merchandise and commercial services trade. A selection of 
these are presented below to provide additional context  to the forecast and trade statistics . The 
WTO has also sought to improve country -specific , time-series modelling projections  of trade by 
including  available , higher frequency  indicators , such as container port throughput, production 
indicators and measures of financial risk , alongside lower frequency trade and GDP data, using 
mixed -data sampling techniques (MIDAS) (see Box  2). 
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-69-15-1
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-90-80-70-60-50-40-30-20-10010Commercial services Transport TravelGoods-related
servicesOther commercial
services
2020Q1 2020Q2 2020Q3 2020Q4PRESS/ 876 
 
- 9 - 
 
  Chart 6 shows daily counts of international flights  and port calls  of container ships , as well as 
prices of copper futures  through 1 March 2021 , depending on data availability.   
 
The number of daily international flights fell around 80% in the first quarter of 2020 as countries 
closed their borders to reduce  the spread of COVID -19. This num ber gradually picked up  as cases 
declined and people resumed limited travel. The end of 2020 saw an uptick in flights as people 
travelled to meet friends and family for seasonal holidays, but a resurgence of the virus has 
reduced flights again in 2021 . International flights are closely related to travel services , but also to 
transport services and goods trade, as passenger aircraft frequently carry air freight shipments.  
 
In contrast to international flights, seaborne transport has been steadier  during the pandemic.  The 
number of port calls dipped in February and April of last year as well as in January of this year, 
reflecting peak periods of infection. The recent dip is w orrying since countries have become 
increasingly reliant on international trade to obtain vital necessities such as  food and medicine .  
 
Daily price s of copper future s contracts decline d sharply  in March 2020 as news of the pandemic 
spread , but have risen  since then , reflecting improving economic prospects . Copper feeds into the 
manufacture of electronics, demand for which has been strong as people and businesses have 
invested in technology to allow remote work.  An uptick in November of last year probably r eflect ed 
expectations of stronger economic growth after the announcement of new vaccines against 
COVID -19. The recent rise  in 2021 may reflect expectations that stimulus measures  in the US and 
elsewhere  will boost economic growth.  
 
Chart  6: International c ommercial flights, port calls and copper futures, 1 January 2020 
- 1 March 2021  
Indices, US$ per pound  
 
Source:  International commercial flights - OpenSky Network; Port calls - Cerdeiro, Komaromi, Liu and Saeed 
(2020).  Available at UN Comtrade  Monitor; COMEX copper futures - Chicago Mercantile Exchange 
(CME) . 
 
Finally, Chart 7 shows the daily volume and average tone of new s reports containing phrase s 
related to "economic activity", as monitored by the GDELT Project Summary Service. At the heigh t 
of the pandemic, press reporting increased and the average tone of articles was mostly negative. 
As the pandemic progressed over the recent months, the number of articles declined  but remained 
above  pre-pandemic levels. The tone of report ing became more positive with the announcement of 
0.000.501.001.502.002.503.003.504.004.505.00
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US$ per poundIndex, January 2020=100
International Flights (left axis) Port Calls by commercial freights (left axis) COMEX copper futures (right axis)PRESS/ 876 
 
- 10 - 
 
  vaccines  against the virus in November. A recent flattening in tone and the bottoming out of 
intensity could be related to the resurgence of the pandemic.  
 
Chart 7 Illustration of phrases related to economic activity, 01 J anuary 2020 – 15 March 
2021  
(% and index)  
 
Source:  The GDELT Project Summary Service.  
END 
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Volume Intensity (left axis) Average Tone (right axis)BOX 2: FORECASTING TRADE IN SELECTED ECONOMIES USING MIXED -DATA SAMPLING  
In the current forecast, the WTO used a relatively novel technique called mixed -data sampling 
(MIDAS) to refine import forecasts for Brazil, China, and the United States. MIDAS allows the use 
of higher frequency data (e.g. monthly or daily) alongside lower frequency data (e.g. quarterly 
or annual) without the need to average the high frequency values. This avoids loss of 
information in conventional forecast models, which are limited to using variables of the same 
frequency. For instance, conventional models might use monthly export orders averaged over 
each quarter to forecast quarterly merchandise trade. The MIDAS techniqu e makes this 
averaging unnecessary, allowing analysts to exploit all available information on the dynamics of 
the higher frequency data. Brazil's MIDAS estimations used Markets Bond Index Plus (EMBI+) 
(reported daily) as a high frequency variable. This all owed the inclusion of information through 
the first week of March of the current year. EMBI+ was chosen because there is evidence that 
credit and financial conditions are a leading indicator for trade. Monthly data on inward loaded 
container throughput for  the port of Hong Kong was used as a high -frequency indicator for 
China, while monthly loaded inbound throughput for the ports of Long Beach and Los Angeles 
were used for the United States. These estimations improved the short -term dynamics of 
forecasts an d had a small but appreciable impact at regional and global levels. In all three cases, 
GDP and merchandise import volumes were used as low frequency variables. MIDAS is a useful 
complement to traditional forecasting techniques. The wider use of this and o ther novel 
techniques should help continue to refine WTO trade forecasts.  