GENEVA – Europe’s sovereign debt crisis and the aftershocks of events such as the Japan earthquake and Arab Spring are expected to slow the growth in global exports to just 3.7 per cent in 2012, the World Trade Organization said Thursday.
That comes after a slowdown to 5 per cent in 2011 and 13.8 per cent in 2010, the global trade body said in its annual report. The figures represent the total volume of merchandise exported across borders, accounting for changes in prices and exchange rates.
“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile,” WTO chief Pascal Lamy said. “The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods.”
The global forecasts are remain uncertain due to potential volatility caused by the eurozone crisis, U.S. debt concerns, economic aftershocks of the Japan earthquake and nuclear crisis, flooding in Thailand and the impact of continuing political unrest in the oil-rich Middle East.
The slowdown in 2012 would bring trade growth below the world average rate of 5.4 per cent over the last 20 years, the WTO said. Developing economies are expected to lead the growth in goods traded this year with a forecast 5.6 per cent increase in exports, compared to 2 per cent for industrialized nations.
The forecast assumes a global output growth of 2.1 per cent, down from 2.4 per cent last year.
Lamy warned that protectionism could rise among governments grappling with the slow trade growth.
“The WTO has so far deterred economic nationalism, but the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness,” he said.
In 2013, the growth rate is expected to recover slightly again to 5.6 per cent, the organization forecast. This was the first time the WTO predicted a growth rate more than a year in advance.
Last year, developed countries did a bit better than expected, while the U.S. became a net exporter of fuels in large part because of coal exports to Japan, WTO officials said.
The U.S. saw exports grow 7.2 per cent in 2011 after a rise of 15.4 per cent the year before. The European Union saw exports grow 5.2 per cent in 2011 after a rise of 11.5 per cent the year before.
Japan’s exports contracted by 0.5 per cent, a sharp turnaround from its 27.5 per cent rise in exports the year before, which had made up for the sharp 24.9 per cent decline in 2009.
China, the world’s biggest exporter, saw its growth in exports slow to 9.3 per cent in 2011 after a surge of 28.4 per cent the year before.
Measured in dollar terms, the total value of merchandise traded in 2011 was $18.2 trillion, a jump of 19 per cent and an all-time global record driven by rising prices for fuels and other commodities.
The WTO, however, bases it forecast for growth rates on the volume of merchandise, since prices are difficult to predict.
The 2010 rate of 13.8 per cent represented a slight downward revision to last year’s reported figure of 14.5 per cent — the biggest rise recorded since 1950 — based on more recent and complete data showing how economies rebounded from the global downturn.