SINGAPORE (Aug 5): The flows of trade that nourish Asia’s economies are losing vigour. As a result, export growth has come to a standstill, dragging down manufacturing activity across East and Southeast Asia. Looking ahead, there are few signs of any recovery in the near term. But the real worry for this region goes beyond the current economic cycle. The threats to the rules-based global trade regime are growing, and that could have dire consequences for smaller, trade-dependent economies such as Singapore. What is discouraging is that Asian governments have yet to come up with effective responses to deal with these structural challenges.

The economic cycle has yet to reach a bottom

Global trade flows fell 0.4% in May, after declining 0.1% in April. Advanced economies’ imports barely grew as declines in export demand in the eurozone and other advanced economies offset growth in demand in the US and Japan.

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