Trade contraction showing signs of bottoming out: WTO
The contraction in trade in response to the economic crisis appears to have begun bottoming out, with Asia already showing a rebound, World Trade Organisation chief Pascal Lamy said on Friday.business Updated: Jul 25, 2009 01:22 IST
The contraction in trade in response to the economic crisis appears to have begun bottoming out, with Asia already showing a rebound, World Trade Organisation chief Pascal Lamy said on Friday.
But Lamy warned against "excessive optimism" as he pointed out that jobless numbers were still rising and that the political and social impact of rising unemployment had not been fully registered.
"Although financial markets have recently shown signs of stabilisation, and the trade contraction ... seems to (have begun) bottoming out, it is unclear how and how long it will take us to exit the crisis," he told delegates of the WTO's 153-member states.
"Although Asia is starting to see a rebound in trade from the very low figures in the first quarter of the year, I would caution against excessive optimism," he added.
Noting that unemployment is continuing to rise, Lamy warned that "its full social and political effects are still to be felt."
Lamy had made a similar warning in early July, saying that the worst social and political effects of the economic crisis are "still to come."
On July 1, the WTO also cut its forecast of global trade contraction for 2009 to 10.0 percent from its March forecast of a shrinkage of 9.0 percent.
It also said then that trading volumes of developed economies will shrink by 14.0 percent instead of 10.0 percent while those of developing economies would contract 7.0 percent, rather than the earlier forecast 2.0-3.0 percent.
The WTO director-general pointed on Friday to the "fragile" world economy and "uncertain" economic outlook and said it was encouraging that world leaders have signalled that they are determined to conclude the Doha round of negotiations for a world trade liberalisation pact.
He urged officials in Geneva to match these political pledges with practical progress in negotiations here and prepared them for a "busy and productive autumn."
"It is clear that for our political leaders we are now entering the end-game.
"Therefore we need to urgently translate this change in atmospherics into a clear path for engagement across the board in the negotiations in Geneva so that we can get to the arrival point on time," he said.
The Doha round was launched in the Qatari capital in 2001 but has foundered ever since over disputes between developed and developing nations on measures to ease restrictions on trade in agricultural and industrial products.
The latest political commitment to push negotiations forward was made by trade ministers attending the Asia-Pacific Economc Cooperation forum.
A recent Group of Eight summit of leaders from the world's most powerful nations and emerging economies have also pledged to wrap up the talks by 2010.