Global trade will fall by nine percent this year, according to World Trade Organization (WTO) forecasts, the biggest decline since World War II.
Considering that in 2007 trade grew by six percent, the 2009 figures represent a significant fall and have sparked fears of protectionism, initially brought on by the possibility that the US stimulus package would contain a ‘Buy American’ clause.
“The decline in trade in 2008 is a symptom of recession, not its cause,” explains Alan Kohler, business columnist. “Even the most nationalistic politicians understand that trade means jobs. There will be many problems facing the world polity this year, but protectionism, in my view, will not be one of them.”
The WTO has warned against protectionism—“the risk of aggravated protectionism is rightly a source of concern going forward”—but puts the simultaneous global slowdown, an increased number of global supply chains, which means many countries are affected when consumption rates drop, and a shortage of trade finance as the key reasons for trade in decline.
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