The most recent WTO reports show that world trade has lost momentum in recent years, after the disturbances caused by the COVID-19 pandemic, due to inflationary pressures and rising interest rates, which depressed demand in many countries and dampened global GDP growth. 

Geopolitical tensions and the adoption of protectionist measures are also obstacles for international trade to gain more strength. Although the picture is not yet conclusive, there are signs of fracturing of trade relations, mainly involving the US and China.

This Letter IEDI, based on the study carried out by UFRJ professor Marília Bassetti using WTO data, analyzes the recent trends in world trade, with emphasis on manufacturing goods, identifying the evolution of Brazil in the rankings of the largest global exporters and importers.

The volume of trade in goods grew by about 3% in 2022, equivalent to less than 1/3 of the 2021 figure, and in 2023 it fell 1.2%, according to the latest Global Trade Outlook. Trade in services, which until 2022 had not overcome the pandemic, continues to grow more intensely, but decelerated from +15% in 2022 to +9% in 2023.

WTO expectations point to a recovery of foreign trade in goods in the current and next years: +2.6% in 2024 and +3.3% in 2025, in volume. Despite this, trade is not expected to grow far ahead of global GDP, constraining export-based national economic growth strategies.

This has been the pattern since the global crisis of 2008/2009, which interrupted a long period of strong dynamism in international exchanges. The WTO points out that in 1990–2000, trade growth was 2.3 times more intense than that of global GDP, falling to a ratio of 1.5 between 2001–2008. This ratio was only 0.9 in 2011–2023.

The slowdown in world exports of goods from 2021 (+8.6%) to 2022 (+2.3%) was felt in almost all regions of the world, but to a greater extent in Asia (from +13.1% to +0.4%). Brazil escaped the general trend and registered +4.7%, above the world rate and higher than its own 2010–2022 average (+2.8%).

In 2023, when global exports of goods fell 0.6%, the worst results occurred in Europe (-2.6%) and in the Commonwealth of Independent States (-6.2%), with the lengthening of the war in Ukraine and inflationary developments. Brazil once again went in the opposite direction and registered +8.8%, with the contribution of the super harvest of grains and the performance of the branch of oil and biofuels. 

In addition, as the WTO points out, commodity price variations not fully accounted for in data deflation may have influenced aggregate results and, consequently, favored Brazil.

Thus, Brazil's share of world total exports of goods increased in both 2022 and 2023, from 1.26% in 2021 to 1.34% and then to 1.43%, the highest participation since 1955 (1.51%). 

In 2022, this was not enough to maintain our position in the global ranking and we fell from 25th to 26th, surpassed by Malaysia. In 2023, however, we rose again, reaching the 24th place, our best position in the last ten years (in 2013 we were in 22nd place).

The ranking of the world's largest exporters is led, quite stably over the past few years, by China, in 1st, with 14.2% of the total, followed by the US, with 8.5%, and Germany, with 7.1%.

It should be noted that since the 2000s China has been sharply gaining share, accounting for almost the same share of the USA and Germany combined (14.9% versus 15.2%, respectively) in 2021. Since then, the gap has increased to the detriment of China (0.8 p.p. in 2022 and 1.4 p.p. in 2023), but it is too early to conclude there is an ongoing reversal of the trend the Chinese were able to build so far.

In the case of manufacturing goods, the latest WTO data refer to 2022, so the ranking of the largest exporters of these products could only be updated until then. Here too, China is the leader (1st place), followed by Germany (2nd) and the USA (3rd), but the Chinese preponderance is undisputed.

China's share of world manufacturing exports has been repeatedly higher than the sum of the US' and Germany's since 2019, with an increasing advantage. In 2022, China alone accounted for 21.2% of the total vis-à-vis 16.5% of next two countries together. Even including Japan (4.1%), which occupies 4th place, the Chinese share remains higher.

As for Brazil's position, we continued to expand our participation in 2021, but did not move in the ranking of manufacturing exports. In 2021 and 2022, we were in 34th place, although our share went from 0.47% to 0.54% of the total. 

With this, we resumed the pre-pandemic situation, since in 2018–2019 we were also the 34th, with a participation close to that of 2024 (0.57% and 0.52%, respectively). In any case, it is worth remembering that in 2010 we were the 28th largest exporter of manufacturing goods and had a share of 0.71% of the total— certainly small compared to the size of our industry, but well above the current fraction.

Since 2010, two asymmetries have been growing in the case of Brazil. The first is the increase in the distance between our position in total exports of goods versus exports of manufactures, reflecting the concentration of our basket in primary goods. 

In 2010, we were the 22nd largest exporter of goods, the 28th largest seller of manufacturing goods (difference of 6 positions) and our participation in the first case was not even double our participation in manufactures. In 2022, Brazil was, in the ranking of exports, 8 positions above its place in manufacturing goods; the country's share in the world total was 2.5 times its share in manufactures.

The second asymmetry concerns the distance of our positions as an exporter and importer of manufactures, reflecting the repeated deficit in the balance of these goods. In 2010, Brazil was the 28th in the ranking of exporters and the 22nd in the ranking of largest importers of manufacturing goods, that is, a difference of 7 places. In 2022, we were 34th and 22nd, respectively, which widens the gap to 12 positions.

Our share of manufacturing imports was 1.8 times our share of exports of these goods in 2010. In 2022, this ratio rose to 2.35 times. In other words, our decline in global trade is much more on the side of exports than on the side of imports of manufactures.

The WTO also separately identifies some branches of the manufacturing industry, allowing some detail on the evolution of foreign trade in such goods. It is noteworthy the difference in Brazil's export basket vis-à-vis the world aggregate. The only branch with a higher participation in our basket than in the world's is iron and steel: 5.2% versus 2.5%. 

All other manufacturing branches are underrepresented in our basket. One of the biggest gaps is in office and communication equipment. In our case, they represent only 0.3% of total exports of goods and in the world aggregate 10.3%. Machinery and equipment also draw attention: 9.6% in the Brazilian basket versus 30.8% in the world's.

The full text is available in Portuguese.