World trade suffered a severe blow from late 2008 to 2009, but the recovery has been fairly robust, contrary to the concerns that we were witnessing a possible re-run of the Great Depression. The above graph, accompanying a story by Floyd Norris in the NYT "A Surge in Trade in Some Countries, but Others Lag", shows (partly) why Australia has done better than other countries.
The figures are based on each country’s reported trade in goods, valued in dollars for the sake of consistency. The chart shows the change for each country’s trade for three-month periods ending in the month shown, compared with the same three-month period a year earlier.
A year ago, trade appeared to be collapsing around the world, in large part because of the credit crisis and the reactions of both companies and consumers to it. Even with the recent surge in trade, none of the countries shown are exporting goods at the highest rate ever, and only one — China — is importing more goods than it ever did.
In the United States, imports are rising a little faster than exports, with both growing around 20 percent in the first quarter, compared with the year-earlier period. It was the first calendar quarter to show year-over-year growth in trade since the third quarter of 2008. It was near the end of that quarter that Lehman Brothers failed and worries of financial crisis grew.
German trade is growing more slowly than in the United States, but the country continues to run large trade surpluses, with exports 21 percent higher than imports in the most recent three months available. By contrast, Japanese exports are 12 percent higher than imports, and the figure in China is just 1 percent.
Gowth in trade is generally more restrained in the so-called Gips countries of Europe — Greece, Ireland, Portugal and Spain. But their circumstances vary widely. In Ireland, both exports and imports are running lower than they were a year earlier, but the country continues to benefit from a very large trade surplus, with exports 82 percent higher than imports.
In terms of growth in trade, the figures are similar in Greece, with imports falling and exports almost level with those of a year ago. But Greece continues to face a large trade deficit, and would need a real surge in exports to cut into that deficit. For the three months through February, exports were 63 percent lower than imports.
In the United States, which faces chronic trade deficits, the margin is 31 percent, roughly half as large as the one faced by Greece.
Making Greece’s exporters competitive will be a very difficult task while the country remains in the euro zone. If it does, the likelihood is that there will be a prolonged period of deflation, with wages being reduced in an effort to cut costs.
In China and India, imports have been growing at a faster pace than exports and Australia is providing quite a few of those imports. In Japan, however, our second largest export market, imports have not recovered as much as exports. This is partly because Japan now exports so much to China. The US has seen imports and exports recover at roughly the same pace and in the most recent figures the US trade deficit increased slightly.
Most interestingly, Norris reports that China is no longer running a large trade surplus:
In fact, the monthly average surplus for the most recently reported three months — February through April — was only $683 million. For a country that imports and exports $10 billion a month, that is a negligible number.