In a sign of a complete turnaround, global trade volumes rose at their fastest pace since 2010 at the end of the first quarter in 2017, according to an analysis published by World Trade Monitor.
But this shows that almost all of the recent volume increases is due to a jump recorded in November 2016, reported New York's Brink magazine.
Worse yet, further analysis of the World Trade Monitor data reveals that the spike in world export volumes recorded in November 2016 is a historical anomaly.
The revival in export volume growth varies considerably across world regions. Compared to a global export volume expansion of 2.4 per cent over the six months from September 2016 to February 2017, export volumes grew 0.1 per cent in Europe, one per cent in the US, 2.5 per cent in Asia, 7.9 per cent in Japan, and 12.4 per cent in Latin America.
The latest data on world export prices is also not good. The World Trade Monitor's index of global export prices is 20.5 per cent below its peak. Looking at the data over time, much of the deterioration in export prices happened in 2015 and 2016. There is no comparable improvement in world export prices to match the strange jump in world export volumes in November 2016.
This is not just a commodity price or currency phenomenon; every major region of the world has seen export prices languish below previous peaks, with the shortfall ranging from 9.8 per cent for US exporters to 45.9 per cent for exporters from the Africa and the Middle East.
Excess capacity in heavily traded sectors - such as steel and aluminum - as well as the spread of government-provided export incentives have almost certainly reduced prices in global markets.
The Global Trade Alert team has documented 411 policy initiatives since the start of the global financial crisis that impose some type of localisation requirement. Fiscal incentives to exports have been even more pervasive.
While direct cash payments for manufacturing exporters are banned under WTO rules, this has not stopped numerous governments from introducing many incentives to export through national tax systems. The impact of such incentives on the maritime sector is probably positive.
It has become clear that few senior executives of large manufacturing firms are willing to shed much political capital defending free trade. With little opposition to populist trade policies in sight, on net, the current policy environment is unlikely to be supportive of a sustained revival of global trade growth in 2017 or 2018, the report concluded.