January 2021

Covid ‘to trigger 5.6 per cent fall in global trade’

The coronavirus pandemic is expected to have triggered a 5.6 per cent decline in the value of global merchandise trade in 2020 compared with previous year, marking the biggest fall in merchandise trade since 2009, when trade fell by 22 per cent, a report said.

Th nowcasts – data-led projections for the immediate future – were published as part of UNCTAD’s comprehensive annual Handbook of Statistics for 2020, which presents the statistical landscape for 2019 with nowcasts for 2020.

The predicted decline in services trade is much greater, with services likely to fall by 15.4 per cent in 2020 compared with 2019. This would be the biggest decline in services trade since 1990, when this series began. In 2009, following the global financial crisis, services trade fell by 9.5 per cent.

UNCTAD’s quarterly International Trade in Services Bulletin, which contains the latest detailed information, shows that this plunge has been driven by a considerable decline in travel, transport and tourism activity. The handbook usually presents a wide variety of statistics relevant to international trade and development for the preceding year and has recently included nowcasts to anticipate the figures for the year of publication.

The coronavirus pandemic however transformed business as usual in 2020, increasing demand for up-to-date figures on the economic impacts while also impacting statistical modelling.

“Unlike previous years however, the models that nowcast international trade and GDP had to grapple with some of the most unusual circumstances in living memory,” said UNCTAD’s chief statistician, Steve MacFeely. “So much so, the existing models broke down under the strain and had to be redesigned and rebuilt during the year.”


Asia to lead global vinyl chloride monomer capacity

Asia is forecast to lead the global vinyl chloride monomer (VCM) capacity additions, which is likely to increase from 26.91 million tonnes per annum (mtpa) in 2019 to 31.25 mtpa in 2024. This is at an average annual growth rate (AAGR) of 3 per cent, according to GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Global Vinyl Chloride Monomer (VCM) Industry Outlook to 2024 – Capacity and Capital Expenditure Forecasts with Details of All Active and Planned Plants’, reveals that the global VCM capacity is poised to register a total growth of 11 per cent from 49.38 mtpa in 2019 to 54.81 mtpa in 2024. Asia is expected to have a new-build and expansion VCM capacity of 2.93 mtpa from 9 new-build and expansion projects during the same period.

Krishna Teja Pappoppula, Oil and Gas Analyst at GlobalData, says: “Within Asia, China leads in terms of capacity additions, with capacity increase of 2.11 mtpa by 2024, which accounts for more than 70 per cent of the region’s capacity additions. Major capacity additions will be from the Tianjin Bohai Chemical Development Company Tianjin Vinyl Chloride Monomer (VCM) Plant with a capacity of 0.80 mtpa by 2024.”

GlobalData identifies Thailand as the second highest country within the region in terms of capacity additions, with a capacity increase from 0.99 mtpa in 2019 to 1.42 mtpa in 2024, at an AAGR of 7.2 per cent. These capacity additions will be from the Vinythai Map Ta Phut Vinyl Chloride Monomer (VCM) Plant with a capacity of 0.43 mtpa by 2024.

India will be the third highest country within the region in terms of capacity additions with a capacity increase from 0.97 mtpa in 2019 to 2.55 mtpa in 2024. Major capacity additions will be from the HPCL GAIL JV Kakinada Vinyl Chloride Monomer (VCM) Plant, with a capacity of 0.30 mtpa by 2024.


Abu Dhabi sees surge in industrial facilities licences

The Abu Dhabi Department of Economic Development (ADDED) has announced that 365 industrial facilities operating in Abu Dhabi have added commercial and service activities to their existing licenses.

The revelation follows the Department’s Industrial Development Bureau’s (IDB) recent resolution to allow the addition of 14 new commercial and service activities to industrial licences, aiming to support investors and business owners; create a promising investment environment; and boost the ease of doing business in the emirate. According to the report issued by ADDED, a total of 547 services activities were added to the industrial ones. It further states that 21.5 per cent of the 1,697 industrial establishments licensed in the emirate took advantage of these services.

Rashed Abdulkarim Al Blooshi, Undersecretary of ADDED, highlighted the positive response of industrial companies towards the resolution that shows their interest to expand businesses in Abu Dhabi, which will in turn boost their contribution to the business sector and increase trade activities in the emirate.


Trade decline in APAC seen at ‘modest’ 1.9%

While worldwide trade is expected to fall by 14.5 per cent in 2020, trade in the Asia and the Pacific region could contract by around 1.9 per cent, said twhe UN Economic and Social Commission for Asia and the Pacific (ESCAP).

The rest of the world, however, fared worse, and as a result, the region’s share in global merchandise export and import is expected to rise to an all-time high in 2020, to 41.8 per cent and 38.2 per cent respectively, up from 39.9 per cent and 36.9 per cent a year earlier.

The UN body also cautioned that the path towards a full trade recovery remains “highly uncertain”, with unfavourable macroeconomic conditions in many economies along with high unemployment, debt and deflation, and underlying structural challenges impeding a fast rebound. Smaller economies face additional obstacles due to the pandemic’s impact on travel and tourism, and remittances. 

According to Armida Salsiah Alisjahbana, Executive Secretary of ESCAP, Covid-19’s “devastating effect” on both developed and developing economies also risks pushing millions back into poverty. “I urge countries in the region to work towards developing a better set of trade rules that are resilient in times of crisis and stimulate sustainable economic recovery for inclusive and greener economies,” Alisjahbana said.


China to lower tariffs for imports in 2021

China will reduce or cancel tariffs on certain imported goods and materials starting in 2021 in a bid to expand imports, boost the domestic market and support the formation of high-standard free trade areas, said the Ministry of Finance.

The new interim tariff rates on imports, which will be lower than Most Favoured Nation (MFN) tariff rates, will apply to 883 kinds of goods as of Jan 1, including foods, medicines and IT products, added the Office of the Customs Tariff Commission of the State Council, which is based in the ministry. Import duties will be eliminated on some raw materials for medicines for cancer, and on some special formula foods for sick children.  

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