What's going on?

The World Trade Organization (WTO) knows a thing or two about trade and it�s now forecasting that global trade (i.e. the exchange of goods and services between countries) will grow by only 2.8% this year – that�s down from a previous prediction of 3.9%.

What does this mean?

Interestingly, before the 2008 financial crisis, trade grew at twice the rate of overall global economic growth, i.e. cross-border commerce was becoming a bigger part of the economy. But since 2008, trade has only grown in line with economic growth… i.e. slowly! While part of the slow trade growth is because the world�s economy is stuck in a rut, it�s also clear that trade isn�t increasing in importance like it was in the �90s and early 2000s when �free trade� was such a big deal.

Why should I care?

The bigger picture: Protectionism is back. Presidential candidates Donald Trump and Bernie Sanders have both expressed a lot of anti-trade rhetoric recently. The Trans Pacific Partnership, which was negotiated last year but still needs to be approved by various legislatures, faces an uphill battle for approval � especially in the US. It seems that the whole argument of whether or not �free trade� is a good idea is very much back on the political agenda.

For you personally: �According to the WTO, the problem is a lack of demand. That means that, very simply, people don�t want to buy as much stuff. Part of that is probably because the economic recovery from the financial crisis has been weak (i.e. slow wage growth = less demand for goods), but there�s also an argument that technology has dampened demand for many products. For example, 10 years ago you might have bought a phone, a TV, a flashlight and a home computer � now you just buy an iPhone.