LaSalle has looked at the likely macroeconomic costs of increased barriers to trade and their potential consequences for European real estate markets.
Until recently, free trade seemed to be a crucial ingredient to the dominant political and economic narrative. After several rounds of trade liberalisation, and except for the immediate aftermath of Lehman Brothers’ collapse in 2008, the world economy enjoyed virtually seven decades of uninterrupted growth in export volumes. Global tariffs dropped tenfold from 40% fifty years ago to just 4% currently. Rapid evolution of supply chains was facilitated by the removal of trade barriers that followed the completion of the Uruguay Round in 1994 and the creation of the WTO, plus the integration of China and the Soviet Union. Over that period global trade growth outstripped economic growth by nearly a factor of two resulting in world trade (imports + exports of goods and services) accounting for nearly 45% of world GDP growth since 1990.