WTO: Global trade will slow down in 2012
Cross-border trading will slow down this year as global economies deal with a rash of aftershocks from the European debt crisis, natural disasters in Japan and Thailand, fluctuating exchange rates, the Arab Spring protests and more, the WTO said Thursday.
The volume of international exports will grow 3.7%, after slowing more than expected to a 5% expansion rate in 2011, according to the World Trade Organization. In 2010, activity boomed 13.8%.
All that merchandise will be worth $18.2 trillion – a record high and a 19% increase over last year due in large part to spiking commodity prices. But the amount of trading will be slower than the 20-year average rate of 5.4%, the group said.
Closing the gap likely won’t happen for years, at least not until developed countries finish de-leveraging, the WTO said.
“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile,” said WTO Director-General Pascal Lamy in a statement. “The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods.”
With signs that the European Union “may already be in recession” and the U.S. playing catch-up with the labor market, exporting activity from industrialized countries will expand just 2%.
The developing world will have a stronger 5.6% bump in trade.
Last year, U.S. exports swelled 7.2% but were still down from 15.4% growth the previous year.
Japan’s exporting didn’t grow at all – it declined 0.5% after rising 27.5% in 2010.
China, whose export activity soared 28.4% in 2010, hit the brakes and decelerated down to 9.3% growth. Even India, the strongest performer in 2011 with 16.1% growth, still suffered a letdown from the year before.
Lamy cautioned governments against “economic nationalism” and the “steady trickle of restrictive trade measures” that he said are already undermining open borders.
“It is time to do no harm,” he said.
If the economic environment stabilizes – and oil prices don’t continue their rapid run-up – the WTO predicts that trading will improve, growing 5.6% in 2013. The U.S. will likely experience a moderate recovery.
But the organization’s economists cautioned that all of its forecasts were “difficult to gauge due to the extraordinary levels of volatility in financial markets and in the broader economy.”
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