2024-04-10T18:57:54+00:00
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/ The World Trade Organization warned, on Wednesday, of major risks threatening international trade during the current year due to conflicts and geopolitical tensions.
The organization stated in its annual forecasts that “global trade volumes unexpectedly decreased by 1.2% in 2023,” according to Agence France-Presse.
The organization’s chief economist, Ralph Osa, told Agence France-Presse that the decline was “mainly due to Europe’s performance, which was worse than expected,” while the continued rise in energy prices and inflation contributed to a decline in demand for goods.
The eurozone economy witnessed a recession in the last quarter of last year, with the German economy shrinking by 0.3%, but global trade in goods has begun to recover, partly due to a slowdown in inflation.
The World Trade Organization expected that the global economy will continue to grow over the next two years, by 2.6% this year and 2.7% in 2025.
It also expected that the volume of trade in goods would increase by 2.6% during the current year, and by 3.3% in the following year, and expectations for the year 2024 are less than the increase of 3.3% that the organization expected in October 2023.
“We are making progress towards a recovery in global trade, but it is necessary to reduce risks such as geopolitical turmoil and trade dislocation to maintain economic growth and stability,” WTO Director-General Ngozi Okonjo-Iweala said in a statement.
The organization said that developments in international trade in services were much more optimistic last year, recording a growth of 9%.
The organization does not provide specific forecasts about the development of international trade in services, but it said that it expects continued growth this year, especially in the tourism and transportation sectors, coinciding with the Olympic Games in Paris and the European Football Championship.
The organization reported that the inflationary pressures that affected trade last year are expected to decline in 2024.
But she warned that “geopolitical tensions and political uncertainty could limit the extent of trade recovery,” pointing to the Red Sea crisis and disruptions in the Suez Canal linked to the war in Gaza, which she said so far have remained relatively limited.
However, “some sectors, such as automobiles, fertilizers and retail trade, were affected by delivery delays and high shipping costs,” pointing to the increasing “disintegration” of global trade.
Osa cited as an example trade between the United States and China, which reached a record level in 2022.
But last year, trade between the two countries grew 30% less than with the rest of the world.
Last year, the United States increased its imports of information and communications technology-related services from Canada, but reduced its imports of the same services from Asia, especially from India.
The organization also warned of worrying signs regarding the increasing protectionist policies pursued by some countries, declining to specify them.
“It is clear that we are going through an important moment in the history of globalization,” Osa said. “I think that many governments are evaluating or reevaluating their options regarding trade policy, and of course, this will have consequences for the way international trade develops.”