• WTO dramatically cuts 2016 global trade growth forecast

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    GENEVA, Switzerland: The World Trade Organization on Tuesday revised down its 2016 global trade forecast by more than a percentage point, warning growth had hit its slowest pace since the global financial crisis.

    WTO now estimates that global trade will expand by just 1.7 percent in 2016, compared to its April projection of 2.8 percent, and compared to a projection a year ago that trade would swell by 3.9 percent this year.

    The UN agency also revised down its 2017 forecast, with trade now expected to grow between 1.8-3.1 percent, down from the previously anticipated 3.6 percent.

    “With expected global GDP (gross domestic product) growth of 2.2 percent in 2016, this year would mark the slowest pace of trade and output growth since the financial crisis of 2009,” WTO said in a statement.

    It said the downgrade followed a sharper-than-expected decline in merchandise trade volumes in the first quarter, and a smaller-than-expected rebound in the second quarter.

    The contraction, it said, was driven especially by slowing economic and trade growth in developing economies like China and Brazil.

    But North America, which had showed the strongest import growth of any region between 2014 and 2015, was also hit by deceleration, WTO said.

    “The dramatic slowing of trade growth is serious and should serve as a wake-up call,” WTO director general Robert Azevedo warned in the statement.

    He voiced particular concern over the slowdown in the context of growing anti-globalization sentiment.”

    “We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system,” he said.

    Azevedo cautioned against the negative impact of inequality.

    “While the benefits of trade are clear, it is also clear that they need to be shared more widely,” he said.

    “We should seek to build a more inclusive trading system that goes further to support poorer countries to take part and benefit, as well as entrepreneurs, small companies, and marginalized groups in all economies,” he said.

    “This is a moment to heed the lessons of history and re-commit to openness in trade, which can help to spur economic growth,” Azevedo said.

    AFP

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    1. The spectre of the 2008 global financial crisis seems to be hounding still the various world economies causing a negative impact on the global trade growth. Such phenomenon indicates just how shaky and wobbling economic foundations can be if confronted by crises so strong in magnitude that they can be truly devastating. But there are safety measures affected economies have to take to cushion the impact, but then these are temporary in nature. And the sad thing is such measures or call them hedges cannot cover the entire global economies. At best they can only protect a few: and these are the few that experience a dent of trade growth. Those economies that are said to be weak and fledgling will suffer immensely the brunt in as much as their outputs are not quite exposed to the international market. So how can these poor economies bring in revenues. In this global era leveling the playing field does not really benefit all trade players. The small ones are drowned or worst eaten up by trade giants. In this world where economic imbalance is pandemic it’s prudent for one country to establish or maintain a self-sufficient and sustainable economy depending mainly on its internal resources,an example of which is food sufficiency resulting from sound agricultural policy. Improving the quality of our country’s products and services may give us the advantage to tap the international market for their quick and easy selling. Competition is still the name of the game in the business realm. Competitiveness is therefore a must for any economic entity to survive or succeed. And this is measured by its growth in trade.