The slowdown of trade

The slowdown in world trade is reported to be worse than thought. The opinion about the cause of such slowdown is divided between economists: some believe the increasing protectionism is the cause, others think the long term trends that affect world trade. They are all right; however, protectionism could be a short term problem that could be mitigated over time, the increasing of digital trade and the shortening of supply chains are long term changes. The increasing digital trade weakens the power of protectionism, which I believe is a very positive thing to see. Moreover, the shortening of supply chains means firms are easier to find their business partners globally and a decreasing transaction cost. These factors that lead to a slowdown in world trade in the long run are positive and caused by our improved information transformation. Therefore, we need to add omitted digital trade into our trade calculation as well as to measure the cost efficiency of our trade; and by making these two changes, I think we can see that our world trade is actually increasing faster than the current figure and the transaction costs are lowering over time.