The WTO offered two scenarios, noting that estimates of the expected recovery in 2021 are uncertain, and recovery will depend on the duration of the outbreak and the effectiveness of the policy responses.
In related news, the WTO and World Customs Organization pledged to collaborate to facilitate trade in essential goods such as medical supplies, food, and energy.
The World Trade Organization (WTO) expects that world trade will fall by 13% to 32% in 2020, due to the disruptions to economic activity caused by the COVID-19 pandemic.
The expectations were discussed during a trade forecast press conference on 8 April 2020. WTO Director-General Roberto Azevêdo highlighted that the crisis “is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people’s lives.”
The WTO offered two scenarios, noting that estimates of the expected recovery in 2021 are uncertain, and that recovery will depend on the duration of the outbreak and the effectiveness of the policy responses. Azevêdo emphasized the need to take action now to lay the foundations for a strong, sustained, and socially inclusive recovery.
Under an optimistic scenario, the WTO projects that recovery will be strong enough to bring trade close to its pre-pandemic trend. A pessimistic scenario envisages a partial recovery only. Both scenarios expect that all regions will experience double-digit declines in exports and imports in 2020, except for the “Other regions” (Africa, Middle East and Commonwealth of Independent States (CIS) including associate and former member States). The reason for this disparity is that those countries are heavy exporters of energy products, and demand for these products is relatively unaffected by fluctuating prices.
While many look to compare expectations for the current crisis with the global financial crisis of 2008-2009, the WTO notes that the pandemic’s restrictions on movement and need for social distancing affect labor supply, transport, and travel in ways that were not present for the financial crisis. With the current situation, economic sectors ranging from hotels, restaurants, and tourism to non-essential retail trade, as well as some manufacturing, have been severely impacted. In addition, complex value chains have been affected by the pandemic, in particular for electronics and automotive products.
In related news, the WTO and World Customs Organization (WCO) have pledged to collaborate to facilitate trade in essential goods such as medical supplies, food, and energy. In a joint statement released on 6 April 2020, the Secretariats of the two organizations note that they have invited their members to increase transparency by sharing information on new trade and trade-related measures introduced in response to the COVID-19 pandemic. The joint statement also urges members to “ensure that any new border action is targeted, proportionate, transparent and non-discriminatory — as agreed by G20 leaders,” and to rescind the measures once they are no longer needed.
SDG 17 includes a number of trade-related targets, including promotion of a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the WTO (target 17.10) and significantly increasing the exports of developing countries (target 17.11).