x Abu Dhabi, UAESunday 23 July 2017

Trade as an indicator

World trade statistics are fully of dizzying details, but the main point is that when balanced trade is growing, the whole world can expect to grow richer.

The year 2011's heady growth in this country's non-oil foreign merchandise trade, reported yesterday in The National, is not likely to be repeated this year. In a sense, that is good news.

The UAE's imports and exports jumped by 25 per cent last year, compared to 2010. But the increase was really the final stage of recovery from the global slump of 2008-9, which constricted trade flows generally. Globally, trade has almost regained pre-crash levels, so another 25 per cent growth is not to be expected this year.

Trade data can be studied in many ways. That 25 per cent figure, for example, includes merchandise but not services, nor trade via the UAE's free zones. And it includes re-exports.

There is no need to get lost in the nuances and fine print, however, to grasp the key point: foreign trade is not a zero-sum game. That is, when each country exports what it can produce efficiently, and imports what it can't, the whole world ends up richer.

That's why the old goal of self-sufficiency in every sector - food, for example - is no longer seen as convincing.

Similarly, having an overall trade surplus is not always vital. Spending billions to buy airliners, for instance, is a trade deficit item right now but can provide years of future earnings in a strategically-important sector.

Sustainable trade growth is the goal, for the UAE and every country.