According to the World Trade Organization’s (WTO) most recent forecasts, developed nations like the US are likely to be replaced by emerging economies like China as the principal exporters of manufactured goods.
The WTO’s “2013 World Trade Report” predicts the continued, vigorous expansion of international trade in manufactured products, defying the conventional wisdom that a lagging manufacturing industry is gradually losing ground to the selling of services. Furthermore, the report anticipates that textiles and apparel will “account for over two-thirds of world exports and to increase by a factor of almost 4.5 in volume by 2035.”
Despite impressive growth in the services sector as well, including banking, transportation, travel, and insurance, services are expected to comprise no more than 19 percent of all global exports, a meager uptick from 17 percent in 2012. Meanwhile, manufacturing will account for 68 percent of world exports.
Also, the WTO projects that the continued enlargement of the global export market will be propelled by increasingly aggressive developing economies. China will lead the pack, gobbling up 29 percent of the market, a considerable improvement on its 19 percent share in 2012. Conversely, the US’s share of the export market is foreseen losing ground, dropping from 16 percent to 8 percent. The European Union’s (EU) slice of the pie is also predicted to contract significantly, shrinking to 11 percent from 20 percent.
The report’s outlook presupposes both sustained global economic growth and the further liberalization of international trade. While the WTO criticized the EU for several trade abuses, including the violation of anti-dumping regulations, it still praised it for eschewing protectionist measures designed to shield it from foreign competition. A separate report on the EU’s trade practices remarked, “The fact that there has not been a retreat into protectionism is in itself a positive sign.”
Chief WTO economist Patrick Low attributed the tectonic shift in the export market from the developed to the developing world to the changing landscape of business. “Global supply chains have changed the patterns of international trade.”