In short, the global economic meltdown of 2008 had a devastating effect on international trade, with the international market suffering heavy deterioration in the last few months of 2008 and through 2009.
In November 2008, World Trade Organization director Pascal Lamy spoke to the 153 members of the organization, following a meeting with trade experts and bankers, he warned : "The market for trade finance has severely deteriorated over the last six months, and particularly since September. The view expressed this morning by the trade finance practitioners is that the situation is likely to deteriorate in the months to come."
2009 was arguably the worst year for international trade since the 30s. The markets suffered their steepest decline for almost 80 years and three-decades of the liberalization of trade across the globe was reversed as countries sought to protect their assets.
Despite that, it could have been much worse. Although countries tightened their belts in the face of contracted growth and lower industrial output in mid 2009, the situation never really reached the worst-case scenario fears of many trade experts. By the second half of 2009, the East, led by China, were already starting on the road to recovery and other countries in east Asia, such as India, have seen a marked improvement in their fortunes.
For the countries of the west however, the bounce-back to the prosperous days between 2002 and 2008 has not been so swift. In the developed countries of the west, the IMF forecast that international trade would shrink by 14% in 2009, especially in services related to transport, financial services in tourism.
On the positive side, other services such as business and professional services still managed to register small growth, despite the deteriorating trade conditions.
The overall effect of the global economic meltdown has been to see a drastic decline in many forms of once prosperous international trade. It has seen countries become more circumspect with who they trade with, be more guarded over their assets and spending and has allowed emerging nations, such as China and India, to become powerful players in the international trade scene, shifting the balance of power away from traditional western powerhouses.
In November 2008, World Trade Organization director Pascal Lamy spoke to the 153 members of the organization, following a meeting with trade experts and bankers, he warned : "The market for trade finance has severely deteriorated over the last six months, and particularly since September. The view expressed this morning by the trade finance practitioners is that the situation is likely to deteriorate in the months to come."
2009 was arguably the worst year for international trade since the 30s. The markets suffered their steepest decline for almost 80 years and three-decades of the liberalization of trade across the globe was reversed as countries sought to protect their assets.
Despite that, it could have been much worse. Although countries tightened their belts in the face of contracted growth and lower industrial output in mid 2009, the situation never really reached the worst-case scenario fears of many trade experts. By the second half of 2009, the East, led by China, were already starting on the road to recovery and other countries in east Asia, such as India, have seen a marked improvement in their fortunes.
For the countries of the west however, the bounce-back to the prosperous days between 2002 and 2008 has not been so swift. In the developed countries of the west, the IMF forecast that international trade would shrink by 14% in 2009, especially in services related to transport, financial services in tourism.
On the positive side, other services such as business and professional services still managed to register small growth, despite the deteriorating trade conditions.
The overall effect of the global economic meltdown has been to see a drastic decline in many forms of once prosperous international trade. It has seen countries become more circumspect with who they trade with, be more guarded over their assets and spending and has allowed emerging nations, such as China and India, to become powerful players in the international trade scene, shifting the balance of power away from traditional western powerhouses.
