Anadolu photo
GENEVA – The World Trade Organization (WTO) on Wednesday forecast a fall of up to 32 percent in global trade this year as the coronavirus disease 2019 (Covid-19) pandemic disrupts regular economic activities.
Addressing a virtual news conference, WTO Director General Roberto Azevedo said, “Covid-19 has completely upended the global economy and, with it, international trade.”
“Our economists see the volume of global merchandise trade falling by 13 percent this year compared to 2019. If the pandemic is not brought under control and governments fail to implement and coordinate effective policy responses, the decline could be 32 percent or even more,” Azevedo said.
The pandemic, he said, is “first and foremost a health crisis” but also a major social and economic crisis that has left millions of people around the world without job and income.
“Our forecast reflects the enormous ongoing shocks to supply and demand,” said Azevedo who heads the body that regulates international commerce.
He was speaking at the launch of the WTO Annual Trade Statistics and Outlook Report and said that despite the “ugly” numbers, policymakers need to start planning for when the pandemic ends.
The WTO said nearly all regions would suffer double-digit declines in trade volumes in 2020, with exports from North America and Asia hit the hardest.
Trade will likely fall steeper in sectors with complex value chains, particularly electronics and automotive products.
WTO chief warns against protectionism
One factor determining the strength of the world’s recovery would be how quickly the pandemic is brought under control and the policy choices governments make.
“Now, a strong rebound is more likely if policymakers show businesses and households have reason to believe that the pandemic was a temporary one-time economic shock,” Azevedo said.
“A turn towards protectionism would introduce new shocks on top of those that we are currently enduring. Keeping markets open to international trade and investment would help economies and recover more quickly,” he warned.
If the right policies are in place, trade and output could rebound nearly to their pre-pandemic trajectory as early as 2020, or next year, regardless of how steep the initial fall is, Azevedo said.
“The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies, and countries. But policymakers must start planning for the aftermath of the pandemic,” he said.
Urging countries to work together, Azevedo said it was worth remembering that even before the first Covid-19 case was registered, the world was not making the most of trade potential to drive growth.
“To reverse this situation, governments around the world can and must lay the foundations for a strong and socially inclusive recovery. Trade and international coordination more generally will be important ingredients,” he said. (Anadolu)
