While overall growth in global trade was sluggish in the first quarter of 2010, Brazil, Russia, India, and China (the so-called BRIC countries) bucked the trend by showing strong trade increases over the past quarter, according to Capgemini Consulting's Global Trade Flow Index.
The index assesses the quarterly changes in the competitive positions of the 23 countries with the highest trade volumes. The four indicators used to calculate the global trade-flow portion of the index are: total trade (imports and exports) in thousands of TEU (20-foot equivalent) containers, quarter-over-quarter trade growth, number of foreign markets for a country's goods, and domestic market size. Rankings for the top 13 nations are shown in Figure 1.
Global trade levels in the first quarter of 2010 grew by 5 percent, though the pace was slower than expected. This was largely due to fears of a sovereign debt crisis in the European Union (EU) and the volcanic eruption in Iceland, which caused considerable trade disruption.
The largest quarter-over-quarter increases occurred in Brazil, Russia, India, and China, where exports rose by 15, 14, 16, and 13 percent, respectively. The United States, Germany, South Korea, and Australia appear to be best positioned for trade with the BRIC economies, and could therefore recover from the recession earlier than other countries.
Capgemini expects world trade to rebound in the second quarter of 2010 while markets remain free of protectionism. For the near term, however, there are two areas of major risk: the possible inability of the European nations to increase their exports due to the recent weakness in the euro, and the possibility of inflation in China due to an increase in both imports and the flow of money within the Chinese economy from government stimuli.
Slow trade growth is also evident in the container-flow portion of the index, which is based on the number of TEUs passing through the world's five largest ports. As shown in Figure 2, despite an 18-percent year-over-year growth in container throughput, quarterly growth continued to slip in Q1. This appears to largely stem from lower trade volumes, especially with the European nations.