Research the web to find a recent article that discusses a forecast about international trade. This article can be from a global trade organization (such as the World Trade Organization), from a state's commerce and trade website, or from business journals.

I found an article from the World Trade Organization (WTO) titled "World Trade Primed for Strong but Uneven Recovery After COVID-19 Pandemic Shock."

What does the article forecast or predict about global trade as a whole, or trade between specific nations?

The article predicts that the volume of world merchandise trade will increase by eight percent in 2021. This is a rebound from the 5.3 percent decline it experienced in 2020. It is then predicted that growth will slow down to four percent in 2022, but this will still leave the total volume of global trade below the pre-pandemic trend. Additionally, global GDP is expected to increase by 5.1 percent in 2021 and 3.8 percent in 2022, rebounding from a 3.8 percent decrease in 2020. However, the WTO states that COVID-19 and new waves of infection pose the greatest threat to the recovery expectations. Furthermore, WTO Director General Ngozi OkonjoIweala states, "Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need" (World Trade Organization, 2021). Thus, further recovery will be fueled by controlling the virus through global vaccination, which will enable markets to stay open, global trade to rebound, and economies to recover and grow.

What macroeconomic results could occur in the United States if this forecast is correct?

If this forecast is correct, one macroeconomic result that could occur is that GDP, which is a measure of the value of all final goods and services produced within a country within a single year, would likely increase for the United States (Indiana Tech, 2020). This is because the United States saw a downward tick in GDP as a result of the pandemic, much like the global GDP, so it can be assumed that the United States GDP will rebound simultaneously or before global GDP, given the country is having a successful vaccine rollout overall thus far.

Another macroeconomic result that could occur in the United States if this forecast is correct is that the unemployment rate, which is "the percentage of the civilian labor force that is out of work, but still looking for work," could decrease (Indiana Tech, 2020, p. 5). This is because the forecast is essentially predicting a global economic rebound, contingent upon efficient responses to COVID-19 and open economies, so it can be assumed that based on this prediction, the United States economy specifically will rebound, since it is handling the virus more efficiently with vaccines and the economy is opening back up. As a result of a rebounding economy, the unemployment rate will likely fall.

What microeconomic results could occur for the United States is the forecast is correct?

A microeconomic result that could occur for the United States if the forecast is correct is that consumer spending could increase, given that the economy is expected to rebound. Additionally, given that international trade is expected to increase, United States firms may decide to start focusing more on producing only the components they have an absolute or comparative advantage in and having other countries produce the other components necessary for their products. This could help to lower production costs for American firms and help them to better achieve economies of scale.

How would this forecast affect how U.S. business managers anticipate demand and supply, and how they anticipate pricing changes?

This forecast would also affect how United States business managers anticipate demand, supply, and prices to change. As a result of this forecast, business managers in the United States would be encouraged to supply a greater quantity of goods and services because they would be able to reach foreign markets better with increased global trade. There would also likely be an increase in demand for United States products and services, given that the global economy is expected to grow, so consumers would likely have more disposable income and be more willing and able to purchase United States products and services. Business managers can also anticipate price increases because the expansion of the global economy could result in increased inflation, which would raise price levels.

References

Indiana Tech. (2020, August 10). MBA 5125 -

Economic decision making for managers

lesson 6. https://softchalkcloud.com/les

son/serve/aP4S3hylZF6Y2z/html

World Trade Organization. (2021, March 31).

World trade primed for strong but uneven

recovery after COVID-19 pandemic shock.

https://www.wto.org/english/news_e/pre

s21_e/pr876_e.htm

1. How would this global trade forecast affect you as a business manager in your decision making in other areas related to the pursuit of the company's economic self-interest?
2. How could this policy affect the company's ability to pursue:

• New product development?
• Strategic partnerships?
• Competitive pricing strategies?
• High-risk ventures?