Headline December 26, 2016/ ''' *!BECALMED -O'' STUDENTS!* '''

''' *!BECALMED -O'' STUDENTS!* '''

ALTHOUGH AN EMERGING SLOWDOWN in global trade is one hell of a really bad news for many, many emerging markets. But no point  to begin  ''Looking for the Lifeboats'', as yet

Just last year, at the blustery Port of Tilbury, on the eastern outskirts of London, the word in the air is diversification.

Less space is being over to conventional container shipping. Instead, the port's owners are investing in new projects. A large metal skeleton will soon become a refrigerated storage unit, to hold perishables on their way to Britain's supermarkets.

According to Tilbury's chief operating officer, Perry Glading, the country's container ports have a problem with overcapacity. Tilbury's response is to use the port's 1,000 acre site as flexibly as possible.

World trade data bear out Mr Glading's caution. 

In South Korea, a bellwether for the global economy, exports of goods fell by almost 15% year-on-year in August last year, in dollar terms.

In China, the most important link in global supply chains, exports were down by over 5%. British and American exports have also been slipping. 

In the first six months of the year global merchandise trade shrank by more than 13% year on year. From the mid-1980s until the middle of last decade, normal trade growth stood at 7%.

The recently falls can be partly explained by changes in prices. The dollar is strong, reducing the national value of goods priced in other currencies. 

Commodity prices have plunged that not only reduces the value of the raw materials shipped around the world, but also helps hold down input costs- and thus the price of all manner of manufactured goods.

In volume terms, trade is still growing   -by 1.7% year-on-year in the first half of 2015. But that is far below a long term average, of around 5% a year. In emerging markets, volume of growth was weaker still, at 0.3 % year on year.

In the early 1990s trade grew slightly faster than world GDP. 

But later in the decade, China and former Soviet Union began to integrate into the global economy, the  World Trade Organization [WTO] was founded to bolster exchange, and technological change started making it easier to manage, long dispersed supply chains.

As a result,  trade grew twice as fast as the  world economy in 2003-06. Since then, however, it has been slowing. For the past two years world GDP has grown more quickly than trade.

The slowdown is all the more remarkable given that declining transport costs thanks to cheap oil should be boosting international commerce.

The problem is partly cyclical. 

Europe, which accounts for around a quarter of global output but one-third of world trade, is enduring   ''an extremely long cyclical downturn'', according to Paul Veenendaal of the Netherlands Bureau for Economic Policy Analysis. Its GDP growth was 0.8% in 2012-14, compared with 3.5% in 2005-07.

At the same time, falling demand for raw materials in China is harming the economy of many commodity exporters. These countries are also the final markets for many Chinese exports, creating something of a vicious cycle.

One-off events have also contributed. In early 2015 trade with America was hit both by a strike at ports on the west coast, which absorb 50% of imports, and unseasonably cold weather, which put off shoppers.

These disruptions to  supply and demand saw imports fall by 3.4% in the first quarter of the year compared with the previous one.

A study by Emine Boz, Matthieu Bussiere and Clement Marsilli at the Centre for Economic Policy Research estimated that such passing factors were responsible for around half of the slowdown in trade in rich economies in 2012-14.

Yet structured factors play a part, too. A recent IMF working paper argues that trade elasticity  -the amount of trade generated as incomes rise  -has fallen significantly in both China and America.

China is making more at home: the share of imported components in exports has fallen from 60% in 1990s to 35% this decade.

America, meanwhile, has begun  to exploit its huge domestic reserves of shale oil; imports of crude fell by 1.9m barrels a day between 2010 and 2014. 

At an average price of $93 a barrel, that represents savings of $60 billion, or the equivalent of 25% of what America did spend on crude oil in 2014, according to its Energy Information Agency.

The slowing pace of trade liberalisation is another drag. In 2010-14, 109 new trade deals came into force. down from 128 in the previous five years, according to the WTO.

The biggest deal currently under negotiation, the  12-country Trans-Pacific Partnership  [TPP], seems to have run aground. Negotiating new pacts is becoming harder as average tariffs have fallen-

Deals now hinge on much thornier subjects such as labour standards and protection of intellectual property: !WOW! 

The Honour and Serving of the latest ''Operational Research''   on the flow dynamics of World's health continues. Thank Ya all for reading and sharing forward, and see you on the following one:

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''' Capital & Converse '''

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