World trade in goods is set to decline steeply between 13 per cent and 32 per cent in 2020 as countries across the globe battle the Covid-19 pandemic, according to projections made by the World Trade Organization (WTO).

Sectors such as electronics and automotive products, with complex value chains, are likely to be affected the most, according to the WTO Annual Trade Statistics and Outlook Report released on Wednesday.

“A 2021 recovery in trade is expected, but dependent on the duration of the outbreak and the effectiveness of the policy responses,” the report said.

Trade will be hit hard across countries with nearly all regions expected to suffer double-digit declines in trade volumes in 2020, with exports from North America and Asia being hit the hardest.

Services trade may be most directly affected through transport and travel restrictions, the report added.

Even before the crisis started disrupting the world economy, global trade was already shaky due to slowing economic growth and rising trade tensions between major countries. Goods trade fell by 3 per cent to $18.89 trillion in 2019. Exports from both India and China remained stagnant in 2020, as per the report.

The value of commercial services exports rose 2 per cent to $6.03 trillion in 2020. India’s services exports grew 5 per cent to $214 billion during the year.

“The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies and countries. But policymakers must start planning for the aftermath of the pandemic,” said WTO Director General Roberto Azevedo.

Trade will be an important ingredient in the recovery process along with fiscal and monetary policy, the DG added. “Keeping markets open and predictable, as well as fostering a more generally favourable business environment, will be critical to spur the renewed investment we will need. And if countries work together, we will see a much faster recovery than if each country acts alone,” Azevedo said.

Responding to questions at a press conference (through video conferencing) after the release of the report, Azevedo said the WTO was just one of many international organisations coming up with depressing statistics this week. “It should not mean the reversal of globalisation. We have not been cooperating closely enough….We have seen so many export restrictions. That is not a good sign,” he said. No matter how advanced a country is it can never be self-sufficient, Azevedo said, adding that proper answer to the situation was to have international trade functioning properly.

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