International trade in goods: persistent current trends or a turning-point?

Abstract

The article raises the question about the possibility of changing trends in international trade and its acceleration in the coming years. The author examines the main factors responsible for the current slowdown in international trade and concludes that the most fundamental of these is the aging of global value chains (GVC). In the present circumstances due to further fragmentation of production process and transfer of the increasing number of operations abroad the increase in transaction costs begins to exceed the benefits from lower production costs. The author believes that the sharp drop in oil prices in the second half of 2014 and consequently reduced shipping costs could raise profitability of GVC again and accelerate international trade. The asymmetry of the actions of exporters and importers of raw materials in the face of falling oil prices is revealed. The absolute reduction in international trade in 2015 owes much to the fact that exporters, faced with a steep drop in income, immediately reduce consumption and imports. In contrast, importers often don’t hurry with increasing consumption and imports and do it with a delay of 1- 2 years. In view of the foregoing, the author supposes that 2016 could be the year of the long-awaited acceleration of international trade.