Will global trade pick up significantly this year?

Global trade contracted by about 12 percent in 2009 but has started to pick up, the head of the World Trade Organization (WTO) Pascal Lamy said. The WTO has revised its previous estimate of a contraction of about 10 percent in 2009 but declined to give a forecast for 2010.

Whether the pick-up in global trade is short term or sustainable is difficult to say.

“World trade has also been a casualty of this global economic crisis, contracting by about 12 percent in 2009,” Lamy said. He added that it’s a huge drop and the sharpest decline since the end of World War Two.

Asked about world trade in 2010, he declined to give any figure but said: “Certainly there is a pick-up. Whether this pick-up is short term or sustainable is difficult to say but we certainly are picking up.”

Lamy told a meeting organized by the European Policy Center think-tank that opening global trade offered a way out of the crisis and that it was “economically imperative” to conclude the Doha round of talks on a new global commerce pact.

So it seems global trade is picking up but even experts are not sure if it will continue to do so this year? What do you think? Will world trade pick-up this year? If so, how much do you forecast? Or is the rise we have seen so far this year just a temporary increase that will start declining again?

(Photo: Vita Vanaga Photo Xpress)

11 thoughts on “Will global trade pick up significantly this year?

  1. I believe it is too early to tell as the financial markets are still impaired and require much more reform. We're in a pendulum phase where it could swing either direction. I suggest that we step outside the box and debate whether or not an increase in global trade is a good thing if we are not engaged in fair trade and managing the earth's resources responsibly. The global economy is still depending upon a linear materials based model which has pillaged and plundered our planet and led to inequalities within developing and developed nations. Are global trade stats a reliable measure of progress if the system which influenced the global recession has not changed? As far as Wall Street is concerned, it is business as usual.

  2. I'm not suggesting that global trade should not increase. On the contrary, global trade is absolutely vital to the global economy. Unfortunately, the greed of the financial markets precipitated the meltdown and tens of millions of people in the developing world sunk into deeper poverty due to a series of policies and actions which they had nothing to do with.

    Global trade is essential provided we make every effort to make sure that the inequalities are being eliminated. What I am stating is that when global trade increases, and hopefully soon, that we do not lull back into the belief that all is well and we take the finger off the pulse of the patient.
    I am placing the topic of global trade in a philosophical context and suggest that we need to engage in smart trade, trade which is based upon environmentally, socially and economically sustainable principles.
    Trade for the sake of trade is a temporary bandaid and doesn't really address the systemic problems. Globalization has been a major cause for the huge increase in migration to urban areas, thus creating shanty towns and more social decay.

  3. I agree that it's too early to tell – the EU issues are still unquantified and the US is not out of the woods yet, either. China is trying to ramp domestic spend to keep its manufacturing engines going, but if this doesn't work as well as is needed, manufacturing there will need to decline which will mean fewer raw-material imports, so impacting global trade further.

    We live in uncertain times…

  4. It certainly seems that global trade is picking up. However, there are many obstacles that will need to be addressed even if it does pick up. Here are just a couple that come to mind. I am extremely interested in active feedback to these issues and others that you think of.

    1. Will global trade create jobs?
    2. Will the jobs that are created actually help to sustain basic needs such as housing, food, medicine, shelter?
    3. Will the creation of these jobs result in increased demand for the products?
    4. Will it be possible to bridge the gap between third wold nations and the so called economic powers?
    5. What do we do about import and export tarrifs?
    6. How do we regulate quality of manufacturing?

    1. David, I do not believe that the jobs that have been lost during the recession will be re-created. And throughout history there has been rich and poor and it will continue to be so. Don't forget that those tariffs are huge earners for developing countries.

      When it comes to quality of manufacturing that is declining everywhere. It is no better in Sweden than in developing countries. And all because companies use materials of inferior quality to make profits.

  5. Catarina,
    Great questions! Capitol Hill, in America, announced that we need 400,000 new jobs a month this year to get back where we were economically before the economic 'collapse.' When looking at other states, such as China for example, I see growth. Therefore I do feel that global trade will pick up for thriving countries, but I think that the real question is who will be the 'winners' and who will be the 'losers.' This is a great discussion and I'm glad to see you bring it to attention.

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