WTO hikes trade forecasts but cautions on pandemic risk

The World Trade Organization (WTO) revised upwards its forecasts for growth of global goods trade this year and in 2022, but warned of a two-track recovery leaving poor countries behind and downside risks from the COVID-19 pandemic and supply chain problems.

The WTO said on Monday, October 4, it expected merchandise trade would grow this year by 10.8% after a fall of 5.3% in 2020. In March, it had forecast 2021 growth of 8%.

The Geneva-based trade body said that trade growth should slow to 4.7% in 2022, more than its previous forecast of 4%, with trade approaching its pre-pandemic long-term trend.

Director-General Ngozi Okonjo-Iweala described the upgrades as good news but not a cause for complacency, with risks of new outbreaks or variants of the coronavirus.

Low-income countries, where only 28 million vaccine doses have been administered out of a global total of 6 billion, were also lagging, she said.

Asian exports were set be almost 15% higher in 2021 than in 2019 and those of Europe and North America had essentially recovered, but Africa and the Middle East would be below pre-pandemic levels.

Okonjo-Iweala is trying to broker a deal among the WTO’s 164 members to increase vaccine distribution to developing countries, notably on the issue of intellectual property rights for vaccines and other COVID-19 treatments. South Africa, India, and other developing countries support an IP waiver, while developed members, including the European Union, oppose this.

“We hope there will be a pragmatic solution that will be acceptable to both sides,” she said, referring to the WTO’s ministerial meeting from November 30 to December 3.

The WTO said it saw supply chain problems more isolated to particularly sectors, with laptop and mobile phone makers able to find semiconductors, but carmakers suffering after sharply cutting chip orders in 2020.

The WTO’s forecast purely relates to goods. For services, such as IT and passenger transport, the WTO said, there were signs of a recovery but well short of a return to pre-pandemic levels. – Rappler.com