WHEN Apple launched the iPhone in 2007, it deployed a state-of-the-art global supply chain. Although the pioneering smartphone was designed in America, and sold first to consumers there, it arrived in stores from Shenzhen, China. It had been assembled there by Foxconn International from parts made by two firms in Singapore, six in Taiwan and two in America. Since then, competition in smartphones has intensified thanks to lower-cost rivals such as China’s Xiaomi. It uses a similar supply chain, but slightly fewer parts are imported: the growing sophistication of Chinese manufacturers means that more components are being made at home.

The rapid spread and subsequent slight retreat of such far-flung supply chains provides one possible explanation to a puzzle that is troubling policymakers: why international trade has been growing no faster than global GDP in the past few years. In the two decades up to the financial crisis, cross-border trade in goods and services grew at a sizzling 7% a year on average, much faster than global GDP. But although trade bounced back fast from its post-crisis plunge, rising by 6.9% in 2011, it has been decidedly sluggish since, growing by only 2.8% in 2012 and 3.2% in 2013 in dollar terms, even as global GDP grew by 3.1% and 3.2%. When measured in terms of volume, trade is still growing faster than the world economy, but by a decreasing margin (see chart). Having soared from 40% of the world’s GDP in 1990 to a peak of 61% in 2011, trade has fallen back slightly to 60%, the same level as in 2008.

As a result, the notion of “peak trade” is being taken increasingly seriously. Cristina Constantinescu and Michele Ruta of the International Monetary Fund and Aaditya Mattoo of the World Bank argue that the slowdown in trade relative to GDP reflects the end of a rapid evolution of supply chains that yielded big gains in productivity. This innovation was made possible by the removal of trade barriers that followed the completion of the Uruguay Round in 1994 and the creation of the World Trade Organisation (WTO), plus the integration into the world economy of China and the former Soviet bloc. In the absence of further trade deals or more big countries opening up, the evolution has slowed, causing a lasting slowdown in trade.

If this loss of dynamism is a lasting change in the structure of the global economy, then it may help explain the sluggishness of the recovery after the crash. The initial rise of global supply chains, thanks to which imported components (“intermediate goods”) came to account for 30-60% of the exports of G20 countries, brought about a sharp increase in the share of the workforce that is ultimately dependent on foreign demand. In 2008, for example, foreign demand supported 25% of jobs in Germany, up from around 16% in 1995, according to the OECD. France, South Korea and Turkey each saw similarly large increases. Just under half the value of global exports is attributable to parts and materials imported by the exporting country—but that share is no longer rising.

Some economists reckon trade is peaking due less to the limits of current trade arrangements being reached than to a post-crash rise in protectionism. A recent report by economists at Citigroup cites this as one of several factors causing globalisation more broadly to stall. There has been a significant increase in new measures impeding trade worldwide since the crash, to a net 2,500 a year since 2008, compared with barely half that number in 2000. Many of these are non-tariff barriers, including onerous environmental and safety standards. “Even if tariffs are low, for example, it may still be difficult to import a car whose tail-lights are not recognised as conforming to national standards,” notes Douglas Lippoldt, an economist at HSBC. Even so, he points out in “Trading Up”, an upbeat new paper on prospects for trade, new protectionist measures introduced in the year to May affected only 0.2% of world imports of physical goods.

Another factor, say the economists at Citigroup, may be a shift in the composition of global demand away from traded goods and services. In 1995-2007 59% of global economic growth came from advanced economies, which during that period had an average ratio of import growth to GDP growth of 2.5, compared with 1.6 for emerging economies. In 2010-13, emerging markets, with their lower trade intensity, had become the world’s economic engine, accounting for 70% of global GDP growth. (Nonetheless, the share of total global trade that takes place between emerging-market economies has grown to 25% from 12% in 2000.)

The composition of global demand could yet move back towards greater trade intensity, for several reasons. There may one day be stronger growth in the European Union, which has a far bigger share of world imports (33%) than it does of the global economy (19%). As they get richer, it is likelier than not that developing countries will trade more relative to their income.

Recent signs of life in trade negotiations may help. Last month America and China struck a deal which should allow a proposed treaty on trade in information technology among willing members of the World Trade Organisation to proceed. A long-stalled deal among all members to make it easier for goods to pass quickly through ports and customs also seems to be moving forward at last. The Republican takeover of the Senate may also help spur trade deals involving America, several of which are under negotiation. There are huge differences in the share of intermediate imports in exports in different industries, which is a rough proxy for the extent to which trade rules have allowed global supply chains to flourish. In machinery and transport equipment it exceeds 35%, whereas in finance, insurance and food it is below 20%.

Not everyone agrees that, if trade has indeed peaked, it is worth worrying about. Paul Krugman, who won a Nobel prize in part for his work on trade theory, maintains that “ever-growing trade relative to GDP is not a natural law” and “we should neither be amazed nor disturbed if it stops happening.” Others question whether trade has peaked at all: they put the apparent decline down to mismeasurement. For instance, James Manyika of the McKinsey Global Institute argues that there has been a sharp rise in trade in software and other digital goods that statisticians struggle to track, not least because it is often unclear where transactions are taking place.

This is why efforts have begun to construct new trade data based on where economic value is added. The initial findings do not seem to show that trade is slowing down. They also challenge simplistic analyses of where economic clout lies. A study last year by the Asian Development Bank of China’s $2 billion of iPhone exports found that only $73m of their value was added in China, compared with $108m in America and $670m in Japan.

Whether trade is declining relative to GDP and why may not be clear for years. Yet one thing is: were more barriers to be lifted, especially in areas like services and farming where many still remain, it would probably lead to a new spurt in the evolution of supply chains that would lift trade far above today’s “peak”.