World trade is on track to expand by 2.4 percent this year, though there is “deep uncertainty” about economic and policy developments, particularly in the United States, said World Trade Organization (WTO) Director-General Roberto Azevedo on Wednesday at a press conference in Geneva, Switzerland.
The range for growth this year has been adjusted to between 1.8 and 3.6 percent, from 1.8 to 3.1 percent last September, the WTO said. “Overall I think that, while there are some reasons for cautious optimism, trade growth remains fragile and there are considerable risks on the downside. Much of the uncertainty around the outlook is political,” Azevedo said. “We need to keep strengthening the system, delivering new reforms, and resisting the erection of new barriers to trade.”
The WTO has repeatedly revised preliminary estimates over the past five years as predictions of economic recovery proved overly optimistic. Global trade grew by an usually low 1.3 percent in 2016, the slowest pace since the financial crisis, failing to match even its revised forecast of 1.7 percent of last September. “The poor performance over the year was largely due to a significant slowdown in emerging markets where imports basically stagnated last year, barely growing in volume terms,” Azevedo said.
In 2018, global trade is forecast to grow by between 2.1 percent and 4 percent in WTO’s latest analysis. “A spike in inflation leading to higher interest rates, tighter fiscal policies, and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years,” Azevedo warned.
WTO said that clarity was still needed on President Donald Trump’s trade policies, while making a general appeal to resist protectionism. “We should see trade as part of the solution to economic difficulties, not part of the problem,” he said.
President Trump has made reducing U.S. trade deficits a key focus of his economic agenda to try to grow American manufacturing jobs. He has taken particular aim at renegotiating trade relationships with China and Mexico.
Azevdo said he is awaited confirmation of the new U.S. Trade Representative (USTR) nominee Richard Lighthizer. “We are waiting to see the new trade team really in place, waiting for the new USTR to be confirmed so that we can have a more meaningful dialogue. At this point in time we don’t have that. We are still waiting to see how the trade policy itself is going to shape up in the United States.”
