Bringing some cheer to exporters around the globe grappling with Covid-19 challenges, the World Trade Organization (WTO) has projected a fall of 9.2 per cent in goods trade volume in 2020, which is much less than the 12.9-32 per cent decline it had predicted in April.

The growth projection for 2021, however, is lower at 7.2 per cent compared to 21.3 per cent predicted in April, according to the WTO’s revised trade forecast for 2020 issued on Tuesday.

“Strong trade performances in June and July have brought some signs of optimism for overall trade growth in 2020. Trade growth in Covid-19 related products was particularly strong in these months, showing trade’s ability to help governments obtain needed supplies,” said a WTO statement.

But WTO economists warned that the pace of expansion could slow sharply once the pent-up demand is exhausted and business inventories have been replenished that will add to supplies.

In case of a resurgence of Covid-19 in the fourth quarter, the outcomes could be worse than predicted. In contrast to trade, global GDP is estimated to fall by a sharper 4.8 per cent in 2020 compared to a 2.5 per cent fall projected under the more optimistic scenario outlined in the WTO’s April forecast. GDP growth is expected to pick up to 4.9 per cent in 2021, but this is highly dependent on policy measures and on the severity of the disease, the statement said.

India’s sugar subsidies, transport assistance, food stocks scrutinised at WTO

On protectionism

WTO Deputy Director-General Yi Xiaozhun cautioned about countries resorting to protectionism.

“Trade has played a critical role in responding to the pandemic, allowing countries to secure access to vital food and medical supplies... One of the greatest risks for the global economy in the aftermath of the pandemic would be a descent into protectionism. International cooperation is essential as we move forward...,” Yi Xiaozhun said.

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