Warning that the threat of protectionism was greater now than at any time since the start of global economic crisis, World Trade Organisation (WTO) Director General, Pascal Lamy has warned that as long as global economic weakness persists, protectionist pressure will build and could eventually become overwhelming.
``To prevent a self-destructive lapse into economic nationalism, countries need to refocus their attention on reinforcing the multilateral trading system. Trade can once again be an engine of growth and a source of strength for the global economy rather than a barometer of instability. The way is before us, we only need to find the will,’’ Mr. Lamy said in a statement issued by WTO secretariat on Wednesday.
It said world trade growth fell to 2.0 per cent in 2012- down from 5.2 per cent in 2011 -- and is expected to remain sluggish in 2013 at around 3.3 per cent as the economic slowdown in Europe continues to suppress global import demand. The report quoted WTO economists. ``The events of 2012 should serve as a reminder that the structural flaws in economies that were revealed by the economic crisis have not been fully addressed, despite important progress in some areas. Repairing these fissures needs to be the priority for 2013,’’ he added.
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The abrupt deceleration of trade in 2012 was attributed to slow growth in developed economies and recurring bouts of uncertainty over the future of the euro. Flagging output and high unemployment in developed countries reduced imports and fed through to a lower pace of export growth in both developed and developing economies.
It said improved economic prospects for the US in 2013 should only partly offset the continued weakness in the EU, whose economy is expected to remain flat or even contract slightly this year according to consensus estimates. ``China’s growth should continue to outpace other leading economies, cushioning the slowdown, but exports will still be constrained by weak demand in Europe. As a result, 2013 looks to be a near repeat of 2012, with both trade and output expanding slowly, below their long-term average rates,’’ the statement said.