2020 was an eventful year for global trade as consumer shopping habits changed worldwide. New types of exports took center stage, increasing opportunities for markets in Asia, Europe, South America, and emerging international economies. Now that 2020 is over, it's time to look back at all of the changes that shaped global trade this year.
Despite the uncertainty of the pandemic, many exports around the world have remained resilient. The ability to adapt and respond to changing customer expectations with innovative solutions has helped businesses not only survive but thrive. In addition, governments are finally taking action to address trade barriers by considering policies that enable a less restrictive trade environment.
In 2020, China outperformed all other global economies while achieving record export growth. In November alone, Chinese exports increased by a staggering 21%. Following a decline in tourism spending, many residents of developed nations opted to buy products and services that could improve their home lives instead.
Some of the most in-demand products include household appliances, personal protective equipment, consumer electronics, and technology-related goods. Compared to 2019, China's exports grew over $40 billion, fueling economic activity throughout the year. Although trade grew 5% to 18% between China and other Asia-Pacific countries, Europe, and Japan, exports to the US increased by 46%.
Brazil's agricultural exports experienced a massive increase in 2020. Soybeans, beef, cocoa, coffee, palm oil, and frozen food products were some of the best-performing commodities this year. But where are they going? China, Hong Kong, and Macau are the three biggest importers of these agricultural products, accounting for nearly half of all the trade.
In October, Brazil's Ministry of Economy reported a balance of over $5 billion. Now, the South American nation is competing with the US and EU in global agricultural production. Brazil's current macroeconomy and currency depreciation have, in part, helped the country's exports flourish.
Although a second wave of the virus spread throughout Europe in October, retail sales soared as eager shoppers began preparations for the holiday season early. Compared to the same timeframe in 2019, European retail sales increased by over 4% in 2020. If the virus can be contained next year, many experts predict an economic rebound could be on the way.
One factor that's still unclear involves the dispersal of over 750 billion Euros to member states awaiting financial assistance from the International Monetary Fund (IMF). Disputes regarding which companies will still be economically feasible post-pandemic is delaying distribution, though, and putting many business owners at risk of insolvency. The true effect of the stimulus packages remains to be seen.
A future-oriented World Trade Organization (WTO) began to implement policies that support tomorrow's consumers. Telecommunication and internet infrastructure goods can now be traded tariff-free. The new Information Technology Agreement (ITA) established this modern framework for digital trade exports, facilitating innovation, and mobilizing skilled workers.
The European Central Bank (ECB) is planning a second monetary stimulus for Eurozone countries. Known as the Pandemic Emergency Purchase Program (PEPP), the economic program has been extended until March 2022. The first two 1.35 and 1.84 trillion Euro packages helped European businesses recover from financial losses.
Less stringent collateral requirements make the loans more accessible to business owners. Looking ahead, the extended availability of funding could help some European companies stay afloat until a vaccine allows the transition to a new normal, assuming these funds are dispersed soon.
Across the world, governments are increasingly implementing policies that foster trade digitization. Optimizing trade flows with technology has been a topic of debate for many years. Now, mass changes are necessary to ensure economic growth can get back on track long-term. With digitally-enabled trade processes, countries worldwide can adopt proactive measures to avoid economic shutdowns in the future.
The year 2020 threw all of us a curveball but, despite the setbacks, communities around the world came together to prevail. Most importantly, as humans, we managed to remain optimistic and found innovative ways to thrive. Everyone at MODIFI wishes you a wonderful new year!