Thursday, February 2, 2023

WTO eyes feeble global trade recovery in 2017


GENEVA: The World Trade Organization said on Wednesday it expected global trade to rebound slightly in 2017 but warned that deep political and economic uncertainties risked hampering the recovery.

The organisation forecast that global trade would expand by 2.4 percent in 2017, up from just 1.3 percent last year.

But it warned that “the unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled”, acknowledging that trade growth this year could fall anywhere between 1.8 and 3.6 percent.

That still marks an improvement over WTO’s previous forecast issued last September, when it expected global trade to rise between 1.8 and 3.1 percent this year.

And the Geneva-based body said global trade should expand further next year, when it forecasts growth of between 2.1 and 4.0 percent.

But the WTO stressed that its more promising forecasts were predicated on a number of assumptions, including on anticipated economic growth this year of 2.7 percent and next year of 2.8 percent, up from 2.3 percent GDP growth in 2016.

Trade is a key measure of the health of the global economy, which it both stimulates and reflects.

“Trade has the potential to strengthen global growth if the movement of goods and supply of services across borders remains largely unfettered,” WTO chief Roberto Azevedo said in the statement.

But he warned: “If policymakers attempt to address job losses at home with severe restrictions on imports, trade cannot help boost growth and may even constitute a drag on the recovery.”

The WTO, which sets the rules of global commerce, has been sounding the alarm over the “threat of creeping protectionism”, exemplified in a steady flow of protectionist rhetoric from US President Donald Trump’s administration.

Azevedo acknowledged Wednesday that “trade does cause some economic dislocation in certain communities,” but stressed that “its adverse effects should not be overstated, nor should they obscure its benefits in terms of growth, development and job creation.”

“We should see trade as part of the solution to economic difficulties, not part of the problem,” he said.


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