Slow global growth to hit trade in 2012 and 2013, WTO says
Slowing global output growth has led WTO economists to downgrade their 2012 forecast for world trade expansion to 2.5% from 3.7% and to scale back their 2013 estimate to 4.5% from 5.6%. “In an increasingly interdependent world, economic shocks in one region can quickly spread to others. Recently announced measures to reinforce the euro and boost growth in the United States are therefore extremely welcome,” said WTO Director-General Pascal Lamy.
The organisation cites slowing economic output amid more interconnected markets-The World Trade Organization on Friday downgraded its trade growth forecast for 2012 by 32 percent and by 19.6 percent in 2013, citing slowing global output amid a more interconnected marketplace.
The WTO expects global trade to expand 2.5 percent in 2012, compared to a 3.7 percent growth estimate made in April. International trade will rise 4.5 percent in 2013, a 1.1 percentage point revision from its spring forecast. WTO Director-General Pascal Lamy said the recent wave of U.S. quantitative easing and actions to reinforce the euro were key to boosting growth, but more needs to be done to promote free trade.
“The last thing the world economy needs right now is the threat of rising protectionism,” WTO Director General said.
The continuing European sovereign debt crisis and the resulting drop in trade with EU members was the main driver of the WTO’s downgraded forecast. Disappointing U.S. production and job growth, along withslowing Chinese manufacturing expansion, also spurred the forecast revision.
“All of these factors have contributed to an easing of global trade growth, which slowed to a crawl in the second quarter according to new quarterly merchandise trade volume statistics compiled by the WTO,” according to the organization.
World trade in the second quarter expanded 1.2 percent and 0.3 percent from the first quarter. The WTO based its forecast on the assumption that the EU will hold off a breakup of euro membership and the United States will dodge a looming $120 billion sequestration aimed at cutting the federal deficit.
The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Credit: JOC, WTO
Ladies and gentlemen,
Welcome to the WTO Public Forum of 2012.
This year, like last year, has been marked by extraordinary turbulence. Sluggish economic growth rates, high unemployment, and newly released figures on world trade that are just as worrying. In this slowdown, no one has been spared.
But the turbulence we witness this year goes beyond the economic sphere. Like last year, political turbulence is rampant across the globe, food prices are starting to rise once again, although not in the same alarming fashion, and the climate crisis is continuing to go unabated.
As this kaleidoscope of problems plays out, we are also witness to a redistribution of the geopolitical deck of cards on a global scale. With the rise of the emerging countries, new and stronger voices from the developing world are making themselves heard. The poorest countries, once silent, are today much clearer and vocal about their priorities. What they are saying loud and clear is that the rules of the multilateral system must change.
The rules of the game — whether in the trade sphere, in the economic sphere, in the environmental or food security spheres — and indeed across all areas of international policy making, are in need of adjustment. Governments are not only struggling to cope with the vast panoply of domestic problems that they are confronted with, but they must do so against a landscape in which their relative powers have also changed. They must also do so in a world in which interconnections are greater and therefore global commons require stronger multilateral co-operation. And they must compete for spaces, for which previously no one had competed, like the Arctic or cyberspace.
In this challenging era that we live in, citizens are asking for the right to a decent living. They want jobs, they want human rights and they want dignity. The question becomes “can multilateral co-operation live up to their expectation?” Will the international community be able to rise to the multiple challenges with which it is confronted today?
While multilateralism is struggling in almost all spheres of global co-operation, I stand here before you with some optimism. We are after all gathered in the “house of trade”. An international house that rose out of the ashes of two world wars and which took some 60 years to create. Across from this house is the seat of the United Nations, the International Labour Organization, the International Environment House that groups many environmental treaties, and many other symbols of successful international co-operation. This is ’la Genève internationale’ after all.
It is these organizations that teach us a very important lesson: progress in international co-operation is incremental, with some of our best episodes having been born of our worst excesses. Yes, the challenges we face today are multiple, and yes, multilateralism is struggling, but we have proven ourselves to be up to the task before, and we can be up to it again.
The WTO, in many ways, is one of the most successful examples of rules-based multilateralism at work. Its capacity to administer and enforce the global trade rules, including in the present crisis, is widely recognized as a major success in international co-operation. But our members’ difficulties to agree to update our rule book also demonstrates that the WTO is not immune to the geo-economic and geo-political transformations of our time.
The WTO is both an organization and an institution. And I dare say that it is in a better shape as a member-driving institution than as a member-driven organization.
This year’s forum will deal with a vast array of challenges that you, yourselves, have brought to the house of trade. Over a three-day period, we will be hearing from you on issues as diverse as trade and the environment and the regional Free Trade Agreements. You will also meet with the ’WTO Panel on Defining the Future of Trade’ that I have established to advise me on the profound transformations in the global economy, and the drivers of today and tomorrow’s trade.
There are many innovations in this year’s Forum that I urge you to explore. Various ‘Ideas Workshops’ will be launched for the first time to help us generate solutions and benefit from our brainstorming with you. A Social Media Corner will interact with you and the broader world through Facebook and other social networks to allow for a reach-out of a much grander scale. And a fabulous Cartoon Exhibition is taking place in our Atrium and the Delegates Lounge throughout the Forum. In that exhibition, no less than 100 cartoons from about 20 artists from across the globe will tell the story of GATT and the WTO — so don’t miss it. You should never miss a good laugh!
We also have with us the winners of the contest for the WTO Youth Ambassador Programme. Please join me in congratulating Ankita Mishra from India and Karina Hehs from Brazil. We count on you to be strong advocates of multilateralism!
And, now, without further ado, let me welcome one of the main architects and visionaries of ‘Genève Internationale’, of which I have just spoken. Micheline Calmy-Rey, you have the floor.
Director-General Pascal Lamy, in welcoming participants to WTO’s Public Forum 2012 on 24 September 2012, said: “While multilateralism is struggling in almost all spheres of global co-operation, I stand here before you with some optimism. We are after all gathered in the “house of trade”. An international house that rose out of the ashes of two World Wars and which took some 60 years to create.” This is what he said:
Ladies and gentlemen,
Welcome to the WTO Public Forum of 2012.
This year, like last year, has been marked by extraordinary turbulence. Sluggish economic growth rates, high unemployment, and newly released figures on world trade that are just as worrying. In this slowdown, no one has been spared.
But the turbulence we witness this year goes beyond the economic sphere. Like last year, political turbulence is rampant across the globe, food prices are starting to rise once again, although not in the same alarming fashion, and the climate crisis is continuing to go unabated.
As this kaleidoscope of problems plays out, we are also witness to a redistribution of the geopolitical deck of cards on a global scale. With the rise of the emerging countries, new and stronger voices from the developing world are making themselves heard. The poorest countries, once silent, are today much clearer and vocal about their priorities. What they are saying loud and clear is that the rules of the multilateral system must change.
The rules of the game — whether in the trade sphere, in the economic sphere, in the environmental or food security spheres — and indeed across all areas of international policy making, are in need of adjustment. Governments are not only struggling to cope with the vast panoply of domestic problems that they are confronted with, but they must do so against a landscape in which their relative powers have also changed. They must also do so in a world in which interconnections are greater and therefore global commons require stronger multilateral co-operation. And they must compete for spaces, for which previously no one had competed, like the Arctic or cyberspace.
In this challenging era that we live in, citizens are asking for the right to a decent living. They want jobs, they want human rights and they want dignity. The question becomes “can multilateral co-operation live up to their expectation?” Will the international community be able to rise to the multiple challenges with which it is confronted today?
While multilateralism is struggling in almost all spheres of global co-operation, I stand here before you with some optimism. We are after all gathered in the “house of trade”. An international house that rose out of the ashes of two world wars and which took some 60 years to create. Across from this house is the seat of the United Nations, the International Labour Organization, the International Environment House that groups many environmental treaties, and many other symbols of successful international co-operation. This is ’la Genève internationale’ after all.
It is these organizations that teach us a very important lesson: progress in international co-operation is incremental, with some of our best episodes having been born of our worst excesses. Yes, the challenges we face today are multiple, and yes, multilateralism is struggling, but we have proven ourselves to be up to the task before, and we can be up to it again.
The WTO, in many ways, is one of the most successful examples of rules-based multilateralism at work. Its capacity to administer and enforce the global trade rules, including in the present crisis, is widely recognized as a major success in international co-operation. But our members’ difficulties to agree to update our rule book also demonstrates that the WTO is not immune to the geo-economic and geo-political transformations of our time.
The WTO is both an organization and an institution. And I dare say that it is in a better shape as a member-driving institution than as a member-driven organization.
This year’s forum will deal with a vast array of challenges that you, yourselves, have brought to the house of trade. Over a three-day period, we will be hearing from you on issues as diverse as trade and the environment and the regional Free Trade Agreements. You will also meet with the ’WTO Panel on Defining the Future of Trade’ that I have established to advise me on the profound transformations in the global economy, and the drivers of today and tomorrow’s trade.
There are many innovations in this year’s Forum that I urge you to explore. Various ‘Ideas Workshops’ will be launched for the first time to help us generate solutions and benefit from our brainstorming with you. A Social Media Corner will interact with you and the broader world through Facebook and other social networks to allow for a reach-out of a much grander scale. And a fabulous Cartoon Exhibition is taking place in our Atrium and the Delegates Lounge throughout the Forum. In that exhibition, no less than 100 cartoons from about 20 artists from across the globe will tell the story of GATT and the WTO — so don’t miss it. You should never miss a good laugh!
We also have with us the winners of the contest for the WTO Youth Ambassador Programme. Please join me in congratulating Ankita Mishra from India and Karina Hehs from Brazil. We count on you to be strong advocates of multilateralism!
And, now, without further ado, let me welcome one of the main architects and visionaries of ‘Genève Internationale’, of which I have just spoken. Micheline Calmy-Rey, you have the floor.
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