Crypto News: Supply Lines: WTO trade outlook

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The WTO reiterated its expectation that merchandise trade growth is on track this year to exceed the longer-term annual average and is poised to accelerate heading into 2025.

The recovery from last year's slump in goods trade is patchy geographically, with Asia serving as the biggest engine of exports and imports, according to the World Trade Organization's annual report released Tuesday.

"The outlook for 2025 is more positive, with all regions contributing to export and import growth, although there is much more uncertainty associated with longer-term projections," the report said.

Services trade, especially digital commerce and travel, is growing much faster, it said.

This comes despite economies that are struggling with wars and diplomatic tensions, the climate crisis and the rise of protectionism. "These are troubling times for global trade," WTO Director-General Ngozi Okonjo-Iweala said in the report.

Among the headwinds and uncertainties for the future is the way countries with foreign-policy differences are trading less with each other and more with their allies.

"The data suggest that after years of talk of decoupling, trade may be starting to fragment along geopolitical lines," the WTO said.

It was the second time in the past week that a European institution explored how trade flows are increasingly being redirected by geopolitical alignment.

A study from the European Central Bank, by authors Costanza Bosone and Giovanni Stamato, said a 10% increase in geopolitical distance between two countries — measured by the UN General Assembly votes — resulted in a 2.5% drop in their bilateral trade flows from 2012 to 2022.

Although the increasing friction between the US and China makes up a fair share of the effect, the results still indicate a broader effect on trade patterns for 63 observed countries. The paper finds that the impact of geopolitics is stronger in advanced compared with emerging economies.

—Marilen Martin in Frankfurt

Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Gaining on US | Among the more interesting trends in the WTO's 2024 annual report is comparing the share of funding from the US and China for the Geneva-based organization's overall budget. The US's 11.4% is still higher than Beijing's share this year, but only barely and the gap has steadily narrowed in recent years. Collectively, the 27 economies of the European Union account for 31% of total assessments this year. The WTO secretariat employs about 600 people with a 2024 budget of $205 million.

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Bolivian trucker unions launched an indefinite strike with road blockades to protest a fuel shortage in the country, according to a document sent by a union leader via text message.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
See DSET CHOKE for a dataset to monitor shipping chokepoints.
For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
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