As the world grappled with the repercussions of the COVID-19 epidemic in 2021, the global commerce environment underwent substantial shifts. While international trade began to recover from the depression of 2020, new problems and possibilities developed, influencing how corporations handled global markets. In this overview, we look at some of the key statistics and trends that will define international trade in 2021, such as the rise of e-commerce, supply chain disruptions, the impact of regional trade agreements, the shift toward sustainability, digitalization, trade tensions, and the growing emphasis on reshoring and nearshoring. Businesses can better adapt their strategy to the ever-changing global commerce scene if they comprehend these patterns.
Global trade recovery
Global trade began to revive in 2021, following a significant fall in 2020 due to the COVID-19 epidemic. The volume of global merchandise trade is expected to expand by 8.0% in 2021, following a 5.3% decrease in 2020, according to the World Trade Organization (WTO).
E-commerce development was spurred by the epidemic, as consumers increasingly turned to online buying in the face of lockdowns and social distancing measures. Cross-border e-commerce has become even more important for companies trying to extend their consumer base and enter global marketplaces.
Supply chain disruptions
In 2021, ongoing supply chain disruptions continued to have an impact on international trade. Various causes contributed to these disruptions, including industrial shutdowns due to COVID-19 outbreaks, container shortages, port congestion, and transportation bottlenecks.
Regional trade treaties
Regional trade treaties continued to impact global trade patterns in 2021. For example, the Regional Comprehensive Economic Partnership (RCEP) pact, which comprises 15 Asia-Pacific countries, comes into force on January 1, 2022, for the first six countries to ratify it. The agreement is anticipated to boost trade among its members and better integrate the economies of the region.
Shift towards sustainability
Environmental, social, and governance (ESG) considerations are becoming increasingly relevant in international trade. Consumers, investors, and regulators are becoming more concerned with environmentally friendly company practices, resulting in increased demand for environmentally friendly products and more scrutiny of supply chains.
Digitalization of trade processes
The epidemic underlined the importance of digital transformation in international trade. In 2021, there will be a greater emphasis on integrating digital technologies like blockchain, artificial intelligence, and the Internet of Things (IoT) to improve supply chain visibility, shorten customs procedures, and boost overall trade efficiency.
Trade tensions and protectionism
In 2021, trade tensions between major economies such as the United States and China remained a source of concern. Furthermore, protectionist measures enacted in response to the epidemic have continued to have an impact on global commerce, with governments setting export restrictions on certain items or instituting measures to prioritize domestic sectors.
Reshoring and nearshoring
Many businesses began considering reshoring (bringing production back to the home country) or nearshoring (relocating production closer to the home nation) in 2021 in an effort to mitigate supply chain risks and lessen reliance on distant suppliers.
These trends and statistics provide a snapshot of the global trade situation in 2021. It is important to highlight, however, that the situation is always changing, and firms should stay up to date on the newest developments and adjust their strategy accordingly.