WTO: Growth of world trade heads down

World trade growth sharply decelerated to 5.5 percent from 8.5 percent year-over-year in 2007 and could drop to 4.5 percent this year, according to preliminary estimates by the World Trade Organization.

The international body said continuing strong growth in emerging markets were not enough to offset economic slowdowns in developed countries.

WTO economists forecast developed markets will grow 1.1 percent in 2008 compared to 5 percent growth in developing countries, putting combined world growth at 2.6 percent and resulting in global trade expansion of about 4.5 percent, not considering inflation. The organization said preliminary figures and predictions were difficult to develop because of the extreme market fluctuations in world financial markets.

To date, the financial market turmoil, significant price surges and the slow-down of developed economies have not led to a disruption of trade. But protectionist pressures are building as policymakers seek answers to the problems that confront us. More than ever we must reinforce our global trading system with rules that are more transparent, predictable and equitable, WTO Director-General Pascal Lamy said in a statement.

Developing nations and the Commonwealth of Independent States contributed more than 40 percent to world productivity growth in 2007. Developing countries share of world merchandise trade reached a record 34 percent share in 2007, the WTO said.

Both groups of countries are expected to record faster import than export growth this year, contributing more than half of global import growth, it said.

Lamy urged nations to agree on the multilateral trade agenda known as the Doha Round as the best way to help the economic recovery. 

Source: American Shipper