Why is Trade Decling so fast?

Article in FT questions what is the reason behind the fall in trade. Is it demand destruction, protectionism or lack of financing.

Looking at the data from Malaysia it is seems clear that it is a combination of disappearing demand and fall in prices of commodities which is also a consequence of falling demand.

Export Data 2008-2009 comparison

Export Data 2008-2009 comparison

The top trade partners of Malaysia Singapore, Japan and USA import a large quantity of electonics and none of these countries have put up trade barriers to these goods nor is it a Trade Finance issue as most of the exporters are subsidiaries of the parent company like Intel, Dell, Sony etc.

That leaves a precipitious drop in demand.


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