In its annual forecasts, published on Wednesday 8 April, the World Trade Organisation (WTO) expects a fall in world trade of between 13% and 32% in 2020, according to its COVID-19 health crisis exit scenarios.
A contraction in trade probably greater than the one caused by the 2008 financial crisis.
"These numbers are ugly – there’s no way around that”, the organisation’s director-general, Roberto Azevêdo, admitted the same day during a video conference. But he wants to believe that a quick and inclusive recovery is possible. The WTO stresses that the circumstances of these two crises are different, as they are primarily shocks to product supply and demand.
Coordinating the stimulus
Drawing on the lessons from the 2008 crisis, the head of the multilateral organisation believes that fiscal policy, monetary policy and trade policy must all move in the same direction to revive the economy. “Stimulus measures, if well coordinated, can work”, the director-general said, warning that “decisions taken now will determine the future shape of the recovery and global growth prospects”.
“If countries work together, we will see a much faster recovery than if each country goes it alone”, Mr Azevêdo said, warning against protectionism. Rather than erecting trade barriers, he calls on countries to diversify their supply chains and help developing countries emerge from the crisis.
Figures already down in 2019
Trade figures for 2019 were already depressed before the pandemic because of trade tensions and slower economic growth, Mr Azevêdo also pointed out. This is therefore an opportunity to review the trade policy guidelines to work together towards sustainable trade.
Read the full press release: https://bit.ly/2RmfIqN (Original version in French by Hermine Donceel)