Bangladesh’s exports will grow 7.3 percent next year, down 1.8 percentage points from that in 2019, as the ongoing global trade tension continues to hurt business in Asia and the Pacific, a new United Nations report said. Still, the projected export growth of Bangladesh will be the highest among some select countries, according to the Trade in Goods Outlook 2019/2020 of the United Nations Economic and Social Commission for the Asia and Pacific (UNESCAP). The countries include Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, the Philippines, South Korea, Singapore, Sri Lanka, Thailand, Turkey and Vietnam, according to the report released on Wednesday. At the end of 2019, Bangladesh’s overseas sales will see a growth rate of 9.1 percent, also the highest among the countries. The report said Bangladesh will enjoy price benefit for exports next year. The price increase will double to 5.1 percent in 2020 compared to 2.6 percent in the outgoing year. The volume of exportable goods will go up by 2.1 percent next year from 6.3 percent in 2019, data showed. The Asia-Pacific economies may see positive trade growth in 2020 but are still facing downside risks from the adverse impacts of the US-China trade tension, the ESCAP said. Trade in the region contracted in 2019. For the first time since the 2009 global economic crisis, the value and volume of trade in the region have been declining. Total export volume fell by 2.5 percent, while import volume decreased by 3.5 percent. Oil-exporting economies such as Iran and Indonesia as well as Japan, Singapore, Hong Kong and China registered some of the largest declines in export volume. Merchandise trade in the region also faced strong headwinds in 2018-2019 caused by the worldwide economic growth slowdown and heightened trade tensions. These have had an adverse effect on trade, particularly in case of economies closely integrated with China through global value chains (GVCs). Integration of smaller traders into the global and regional economy through GVCs is becoming more difficult. New import barriers increase the cost of production and reduce the competitiveness of companies participating in regional production networks. The ESCAP earlier estimated that the tariff war-related toll on gross domestic product could reach as much as $400 billion worldwide and $117 billion in the Asia-Pacific region. These projections are materialising and could increase unless current efforts to reduce trade tensions are successful. “For the Asia-Pacific region, the challenge is to increase trade and deepen economic integration to support sustainable development. Looking ahead to 2020, the agreement reached between China and the United States is welcoming and should reduce policy uncertainty,” said Armida Salsiah Alisjahbana, the UN Under-Secretary General and executive secretary of the ESCAP. The new guarantees provided by the implementation of the Phase-I deal reached between China and the US might boost investor and consumer confidence enough for trade in the region to grow by about 1.5 percent in 2020. This growth would be felt more in developing economies, which could see 1.9 percent and 2.7 percent growth in exports and imports respectively in 2020. Country-level forecasts vary widely and uncertainties are high. However, it remains highly uncertain whether the trade tensions between Beijing and Washington can be resolved in the near future. Furthermore, the recent decision by India to postpone its participation in signing the Regional Comprehensive Economic Partnership (RCEP) Agreement suggests that not all countries assess the value of accelerating regional integration equally. In 2019, China’s exports dropped by 1.3 percent and imports by 4.7 percent in real terms. As a result, substantial adverse spill-over effects have spread through the region. However, nations such as Bangladesh, India and Vietnam challenged this trend, registering 4 percent to 8 percent export volume gains. “This was mainly due to their role in supplying goods that became tariffed under the US-China trade war.”
Source – The Daily Star
