WTO Sees Trade Decline Possibly on Par With Great Depression
Date: Friday, April 10, 2020
Source: The Wall Street Journal
Global trade flows could fall by almost a third this year, and the scale of any rebound in 2021 is highly uncertain, the World Trade Organization said today.
The Geneva-based arbiter of trade disputes said that if the measures that have brought many forms of economic activity to a standstill can be lifted soon, trade might start to recover in the second half of this year and fall by as little as 13% compared to 2019.
However, if the lockdowns last longer or have to be repeated, movements of goods across national borders could decline by 32%. A decline of that scale would be much greater than that experienced in the wake of the global financial crisis, and equivalent to the collapse associated with the Great Depression, except concentrated in one year rather than spread over three.
The WTO said flows could rebound strongly in 2021, and by as much as quarter. But that will depend on durable and credible measures to lift restrictions.
WTO Director-General Roberto Azevêdo appealed to governments to forgo future increases in barriers to trade as a way of spurring a wider economic recovery. "If countries work together, we will see a much faster recovery than if each country acts alone," he said.