Geneva: There is no good economic news in global trade data and the contraction in world trade volume this year is likely to be a bigger-than-expected 10%, the head of the World Trade Organization (WTO) said on Wednesday. WTO had forecast in March that world trade volumes would contract by 9% this year.
“If anything, it probably will be more like minus 10% than minus 9% in volume, which is a huge drop,” Pascal Lamy told Reuters Television during the Organisation for Economic Cooperation and Development ministerial meeting. “I’m afraid I can’t read any good news in my trade numbers.”
Lamy said the unprecedented collapse in world trade reflected the contraction in both supply and demand during the economic crisis.
Sombre mood: Pascal Lamy says the unprecedented collapse in world trade reflected the contraction in both supply and demand. Jochen Eckel / Bloomberg
The credit crunch had also hit trade finance, making it hard for developing countries to finance imports, he said.
With other organizations, WTO is tracking protectionist pressures resulting from the crisis, and will issue an updated report in the next few days on trade measures undertaken by different countries.
Lamy said this would show whether WTO’s assessment in April that serious protectionist pressures had largely been held in check with some slippages here and there would be confirmed.
Concluding the WTO’s Doha Round would not only open up trade but help fight protectionism by reinforcing WTO disciplines, he said. Lamy said the conventional wisdom among WTO’s 153 members was that the Doha Round—launched in 2001 to help poor countries prosper through more trade—could be concluded in 2010.
He said the mood of the negotiations had improved since the appointment of new trade ministers in the US and India—Ron Kirk as US trade representative and Anand Sharma as commerce and industry minister in India.
“Having good atmospherics on the US side and on the Indian side is a sort of precondition for re-engaging at the political and then at the technical level,” he said.
But the improved atmosphere—reflected in a series of recent optimistic comments by trade ministers about reviving the Doha negotiations—was not enough to clinch an agreement. “WTO deals are not about atmospherics, they’re about numbers, commitments, rules which are very detailed, which is why it’s usually complex,” he said.
On Wednesday, Kirk had said he was looking forward to working closely with his new Indian counterpart after a series of encouraging meetings.