The previous financial year saw the strongest growth in global trade since the GFC, says Aberdeen Standard Investments – despite a record-low number of new trade agreements.
The volume of global trade increased by 5.1 per cent in the years to 1 July 2017, marking the best period of sustained growth since the rebound from the GFC, according to a new Aberdeen Standard Investments economic report.
Most regions saw a boost in trade, with Japan and emerging Asia the standouts due to their sensitivity to the global trade cycle, the report said.
The major exception to the rally in global trade was the Middle East, largely due to OPEC's agreement to curtail oil production, said Aberdeen Standard Investments.
While there has been a broad-based recovery in global trade from the "depths" of 2015, the latest economic readings are still well below their pre-GFC norms, warned the report.
"While there have been a number of contributing factors, one that has likely been important is the trend decline in the number of new trade agreements," said Aberdeen Standard Investments.
"After peaking in the late 1990s and early 2000s when regional trade deals began to take over from multilateral agreements through the WTO process as the engine of global trade liberalisation, the number of new agreements has fallen significantly since the financial crisis.
"Indeed, 2017 saw the fewest new agreements since the beginning of the '90s as the political appetite to further liberalise trade has weakened.
"This partly reflects the fact that many of the ‘easy’ agreements have already been reached but it is also a consequence of shifting political winds. Populist political parties do not have to gain power to influence policy."