WTO cuts 2013 trade forecast, sees protectionist threat
By Tom Miles
GENEVA (Reuters) - The World Trade Organization slashed its forecast for trade growth in 2013 on Wednesday, saying it feared protectionism was on the increase.
It cut its forecast for global trade growth in 2013 to 3.3 percent from 4.5 percent and said trade grew only 2.0 percent in 2012. That was the smallest annual rise since records began in 1981 and the second weakest figure on record after 2009, when trade shrank.
Trade in commercial services also grew by only 2 percent in 2012, to $4.3 trillion.
WTO Director General Pascal Lamy warned that 2013 could turn out even weaker than expected, especially because of risks from the euro crisis, and countries might try to restrict trade further in a desperate attempt to shore up domestic growth.
"The threat of protectionism may be greater now than at any time since the start of the crisis, since other policies to restore growth have been tried and found wanting," he said.
Lamy, who will step down at the end of August this year, called the 2012 growth rate "sobering".
"It's clear that conventional monetary and fiscal policies have failed to produce satisfactory results," he told a news conference at the WTO headquarters in Geneva.
With conventional thinking set against loosening budgets and uncertainty about the benefits of "ever more unconventional" monetary policies, Lamy said that liberalizing trade remained a "good bet at a modest cost", although he said the political cost of reforming was sometimes high. Continued...