Trade intensity has eased, and we see a slowing of trade growth around the world. A detailed study published earlier this year by the McKinsey Global Institute sheds light on these developments. McKinsey looked at 23 different industries across 43 countries over 22 years. It found that many goods-producing value chains are becoming less trade-intensive as they locate closer to their customers.
And as emerging markets like China develop and consume more of what they produce, companies are building more domestic value chains. The bottom line is that the evolving nature of globalization is contributing to slower growth in international trade. This is true for the global economy generally, and for Canada specifically.