Law360 (September 23, 2020, 9:15 PM EDT) -- Global trade in goods fell off between the first and second quarters of 2020 at a rate unseen since the 2008 financial crisis, as countries went into lockdown to combat the spread of COVID-19, the World Trade Organization reported Wednesday.
Every region saw its merchandise exports decline in the second quarter, and the total volume of merchandise traded globally fell 14.3% from the previous quarter, surpassing the 10.2% tumble global trade experienced during the Great Recession between the third quarter of 2008 and the first quarter of 2009, according to the WTO.
Merchandise trade values also plunged 21% compared with the second quarter of last year, according to the data, but did not reach the 33% year-on-year plummet seen in 2009's second quarter, the organization said.
Overall, merchandise trade contracted less sharply than the WTO's April forecast for global trade, which outlined a worst-case scenario in which total global trade decreased by 32%, a fall not seen since World War II.
In June, the organization revised its calculations, predicting a 18.5% contraction in global merchandise volumes in the second quarter of 2020 compared with the previous year.
According to WTO data collected from 72 countries comprising 92% of global merchandise trade, the year-on-year drops were steepest in April and May, which saw the value of global merchandise trade down 23% and 26%, respectively. Things started to improve in June, "as countries in Europe started to relax lockdown measures while some Asian economies saw a modest rebound," the WTO said.
North America was the hardest-hit in terms of export volume decreases, falling 24.5% from the previous quarter, the organization reported.
According to the Organization for Economic Cooperation and Development's Monthly International Merchandise Trade data, the value of North American exports decreased similarly during that period. The U.S. saw its exports down 28.19% in the second quarter, while Mexico's decreased 36.23% just after seeing a slight increase in the first quarter. Canada came out slightly better off than the U.S. during the quarter, with the OECD reporting a 27.6% decrease in export value.
Among commodities, fuel prices tanked in the second quarter, falling 35.1% in their second consecutive quarter of decline. Prices for nonfuel commodities dipped just 4.1%.
In a previous bulletin, the WTO highlighted the resilience of global food supply chains amid trade difficulties imposed by lockdown measures.
Preliminary data on trade of services in the second quarter showed steeper monthly declines globally, from 29% in April to 22% in July, the WTO reported.
"In July, services exports from North American economies were down 30%, while in Asia, China's services exports stopped declining, reflecting the divergent trajectory of the pandemic across regions," the organization said.
--Additional reporting by Sarah Martinson. Editing by Aaron Pelc.
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