However, if nations pull together, the world’s economy has the potential to bounce back in 2021, the intergovernmental body has said. The WTO today issued a forecast suggesting goods trade would shrink more steeply this year than in the global financial crisis a decade ago before rebounding in 2021 as the COVID-19 pandemic recedes – if countries worked together. Global trade would fall this year by between 13 percent and 32 percent, with the lack of clarity explained by the fact that so little about the economic impact of the health crisis was as yet unclear, the forecast suggests.
By contrast, at the height of the financial crisis in 2009, trade fell by 12.5 percent.
Mr Azevedo said: “These numbers are ugly and there is no way around that.”
He admitted comparisons with the financial crisis and even the Great Depression of the 1930s were inevitable.
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However, unlike in those instances, banks were not short of capital and the economic engine was in decent shape.
He predicted: “The pandemic cut the fuel line to the engine.
“If the fuel line is reconnected properly, a rapid and vigorous rebound is possible.”
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Countries working together would see a faster recovery than if each country acted alone, while monetary, fiscal and trade policy all need to go in the same direction.
A turn to protectionism would create “new shocks”, he said.
Trade tensions, notably between the United States and China, led to a 0.1 percent decline in global goods trade last year.
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A number of national leaders have said the crisis and an acute shortage of medical supplies means production should be brought home.
However, Mr Azevedo said no country would really become fully self-sufficient.
Rather, he insisted the answer was to diversify so that supplies came from more than a single region or player.
The Geneva-based WTO said for 2021 it was forecasting a rebound in global goods trade of between 21 percent and 24 percent.
But, Mr Azevedo stressed this largely depended on the duration of the coronavirus outbreak and the effectiveness of policy responses.
This year, almost all regions would suffer double-digit percentage declines in trade, with exports from North America and Asia the hardest hit, the forecast suggests.
Sectors with complex value chains, such as electronics and automotive products, would also see steeper falls.
Services are not included in the forecast, but the WTO predicts said trade in this area may be hit hardest by COVID-19 because of transport and travel restrictions, with knock-on effects for goods.
There are currently 1,452,378 confirmed cases of COVID-19 worldwide, and 83,615 deaths, according to Johns Hopkins University’s Coronavirus Resource Centre.
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