Global Trade Outlook and Statistics Report 2025

Why in news? 

• Global Trade Outlook and Statistics Report 2025

Key Points:-

• The World Trade Organization (WTO) has released its Global Trade Outlook Report for 2025, which forecasts a 0.2% decline in global merchandise trade.
• If trade tensions and policy instability increase, this decline could increase to 1.5%.
• This is a significant reversal from the positive forecast of 2.9% for 2024.

Impact of tariffs

• The report prominently highlights the impact of the ongoing tariff tensions between the US and China.
• Reciprocal tariffs by the US could reduce global trade by 0.6%, while US-China tariff hikes could further reduce trade by 0.8%.
• These figures emerge as the main factors impacting trade.

Regional impact

Report The data show significant imbalances in regional trade:

• Exports to North America are expected to fall sharply by 12.6%.
• Exports to Asia are projected to grow by 1.6%.
• Export growth to Europe is expected to be 1.0%.

These figures indicate that each region may face different economic pressures and trade challenges.

Trade reorientation from US-China tensions

• Declining US imports from China may create new trade opportunities for LDCs and other countries.
• As a result, Chinese exports outside North America may increase by 4% to 9%.

Economic risks and UNCTAD warnings

• UNCTAD (United Nations Conference on Trade and Development) has projected global GDP growth to slow to 2.3% in 2025.

India's Global Trade Position

India's trade position has declined:

• India's rank in merchandise exports has fallen to 14th position, and the share remains stable at 2.2%.
• India's rank in merchandise imports has fallen to 7th position, and the share remains stable at 3.4%.
• India's rank in commercial service exports has fallen to 6th position, and the share has fallen to 5.3%.
• India's rank in commercial service imports has remained unchanged, but the share has declined to 4.1%.

World Trade Organization (WTO)

• Headquarters: Geneva, Switzerland
• The World Trade Organization (WTO) is an international body established in 1995 to regulate global trade between countries.
• The institution was created under the Marrakesh Agreement, 1994, signed by 123 countries following the Uruguay Round of negotiations (1986-94) of the General Agreement on Tariffs and Trade (GATT).
• The WTO replaced the GATT, which had regulated global trade since 1948.
• Members: 166 members, representing 98% of global trade. India has been a member since 1995 and has been part of the GATT since 1948.

Major WTO Agreements:

• TRIMS (Trade-Related Investment Measures): It prohibits measures that discriminate against foreign products.
• TRIPS (Trade-Related Aspects of Intellectual Property Rights): It resolves disputes over intellectual property rights.
• AoA (Agreement on Agriculture): It promotes agricultural trade liberalisation, and focuses on market access and domestic support.

Key reports:

• World Trade Report
•  Global Trade Outlook and Statistics
•  Aid for Trade in Action