The World Trade Organisation has warned of “sub-par” trade growth this year, and with a rather naïve optimism, it has urged multilateral collaboration in response. There is one cyclical and two structural reasons for trade to slow. Cyclically, the immediate post-pandemic era had a surge in spending on goods rather than services. Goods are traded more than services, so that boosted trade to a record share of the economy last year. As spending on goods and services normalizes, trade is likely to fall as a share of the economy.
