WTO cuts trade growth forecast

WTO cuts trade growth forecast

Trade war blamed for sharp downgrade

A pedestrian sign is pictured outside the World Trade Organisation's headquarters in Geneva. (Reuters)
A pedestrian sign is pictured outside the World Trade Organisation's headquarters in Geneva. (Reuters)

GENEVA: The World Trade Organisation has cut its global trade growth forecast for this year to the weakest level in a decade, warning that further rounds of tariffs in an environment of heightened uncertainty could spark a "destructive cycle of recrimination."

"The volume of merchandise trade will increase by 1.2% this year and 2.7% next year, after a 3% advance in 2018,'' the WTO said in a report.

The outlook marks a sharp downgrade from the WTO's previous projections in April, when the Geneva-based organisation predicted a 2.6% gain in global trade in 2019 and 3% the following year.

It also underscores the risks facing international commerce as the US threatens more tariffs on Chinese imports and prepares new, WTO-sanctioned levies on goods from the European Union.

"The darkening outlook for trade is discouraging but not unexpected," WTO director-general Roberto Azevedo said in statement.

"Trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards. Job creation may also be hampered as firms employ fewer workers to produce goods and services for export."

The WTO report cited various risks to trade growth including rising trade tensions, Brexit-related uncertainty in the EU and shifting monetary policy stances in developed economies.

It's the third consecutive year the WTO has reduced its expectations for global trade growth and broadly reflects similar readings from the World Bank and the International Monetary Fund.

Last month, the Paris-based Organisation for Economic Co-operation and Development said the world's intensifying trade conflicts have caused economic growth to dip to levels not seen since the financial crisis a decade ago.

The WTO's revised figures on Tuesday represent a key gauge of the stakes involved in President Donald Trump's effort to overhaul America's trade relationships around the world.

Since the WTO's last report, Trump has escalated his fight with China and tit-for-tat tariffs have continued to weigh on global economic growth. Chinese Vice Premier Liu He plans to visit Washington to meet with his US counterparts during the week of Oct 7. Tariffs on some Chinese imports are set to increase on Oct 15.

Meanwhile, Trump may soon impose new tariffs on as much as $8 billion worth of European goods stemming from a 15-year-old dispute over illegal state aid provided to aircraft maker Airbus SE.

The European Commission is mulling a plan to immediately retaliate with tariffs on more than $4 billion worth of US exports, citing as justification a WTO dispute over prohibited subsidies from two decades ago.

"Risks to the forecast are heavily weighted to the downside and dominated by trade policy," the WTO report said. 

Do you like the content of this article?

Two Thai doubles pairs survive at World Tour Finals

Two doubles pairs from Thailand have advanced to the semi-finals of the HSBC BWF World Tour Finals following a busy day at Nimibutr Stadium in Bangkok on Friday.

9 Dec 2022

Army hospital first stop for freed athlete Griner

American basketball star Brittney Griner arrived back in the United States on Friday morning after being released from a Russian prison in exchange for Victor Bout, an arms dealer known as the “Merchant of Death”.

9 Dec 2022

Second move

Graft busters petition court to sack suspended cabinet minister and accused land encroacher Kanokwan Vilawan and ban her from politics for up to 10 years.

9 Dec 2022