WTO Says Global Trade in Its Worst Year Since Financial Crisisby
Organization cuts trade projections for this year and 2017
WTO cites weaker growth in key regions, rising protectionism
Global trade will expand at the slowest pace since the financial crisis this year, the World Trade Organization said, as weakness in key regions and rising protectionism take a toll.
The Geneva-based organization forecasts that trade will expand 1.7 percent in 2016, down from an April estimate of 2.8 percent. It predicts real GDP growth of 2.2 percent, marking the weakest performance since 2009.
Worryingly, the WTO sees a risk that trade won’t pick up next year, cutting its 2017 projection to a range of 1.8 percent to 3.1 percent, down from 3.6 percent previously. It said with increasing wariness of globalization, governments and authorities must do more to support open trading that’s more inclusive.
“The dramatic slowing of trade growth is serious and should serve as a wake-up call,” WTO Director General Roberto Azevedo said in a statement Tuesday. “This is a moment to heed the lessons of history and re-commit to openness in trade, which can help to spur economic growth.”
The revision follows a sharper than expected decline in trade volumes in the first quarter and a smaller than expected rebound in the second quarter as emerging economies such as Brazil and China remained under pressure. North America was also a disappointment, the WTO said, noting a deceleration there this year compared with 2014-2015.
While the organization sees a number of trade-related indicators improving -- including export orders and container port turnout -- it warned that the overall momentum remains weak with multiple challenges including creeping protectionism.
“We need to make sure that this does not translate into misguided policies that could make the situation much worse,” Azevedo said.