Global trade growth is expected to be lower in 2019 than it was last year, the World Trade Organization forecast on Tuesday, citing widespread ‘tensions’ and economic uncertainty.
The WTO had in its preliminary estimates predicted a 3.7 percent expansion of trade for this year, but has revised that down to 2.6 percent, marking a decline on the three-percent growth recorded in 2018.
‘The fact that we don't have great news today should surprise no one who has been reading the papers over the last 12 months,’ WTO director-general Roberto Azevedo told reporters in Geneva.
In its main annual forecast, the 164-member WTO renewed its concerns about systemic threats that could continue to disrupt the world's economy, notably retaliatory tariffs between China and the United States.
There are indications that ongoing talks between Washington and Beijing could resolve the bruising tariff battle, but timelines for a possible deal are not clear.
Asked if he saw either side emerging victorious in the trade spat between the world's two largest economies, Azevedo said ‘there will be many losers’.
It was therefore becoming ‘increasingly urgent’ that tensions are resolved, he added in a statement.
The WTO is ‘definitely hoping that we will hear good news’ from the US-China talks, said Azevedo, who is a Brazilian national.
A year ago, the WTO projected that trade growth for 2018 would be 4.4 percent.
The fact that the final number was 1.4 percent lower than the initial estimate highlights the considerable downside risks plaguing the global economy, WTO economists said.
For this year, the downside risks again outweigh the upside potential, but a ‘relaxation’ of tensions, especially the lifting of restrictive trade measures, could see 2019 beat the projections, the WTO said.
- 'Smooth' Brexit? -
The projections released Tuesday are based on a ‘relatively smooth’ Brexit playing out over the next two years, WTO economist Coleman Nee told reporters.
Britain leaving the European Union without a withdrawal agreement, or the various other possible Brexit scenarios that remain in play, will impact global trade, Nee said.
But ‘the situation is so fluid,’ Nee added. ‘We will have to wait and see what the final outcome is,’ before fully understanding Brexit's influence on world trade.
The WTO, which works to create a level playing field in global trade, has faced unprecedented criticism from President Donald Trump's administration, which has accused the body's arbitrators of treating the US unfairly.
Azevedo stressed that the WTO leadership was available to help nations work together to improve the global trade climate, but conceded that when tensions mount countries ‘tend to try to go on their own’.
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