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April 13, 2017

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World trade outlook set to pick up

THE World Trade Organization is predicting an uptick in global trade this year and next after a lackluster 2016, while cautioning that uncertainty about policies like protectionism and anti-globalization present risks to its forecast.

The Geneva-based trade body, which has faced rumblings that the Trump administration might move to withdraw the United States, is projecting trade growth of 2.4 percent this year, from 1.3 percent in 2016, which was the slowest pace since the height of the financial crisis in 2008.

Uncertainty over global trade is particularly high. For this year’s forecast, WTO Director-General Roberto Azevedo set a range of between 1.8 percent and 3.6 percent depending on factors including the interest rate environment, fiscal policy, the results of upcoming elections, and the level of appetite for more protectionist or anti-globalization policies.

WTO’s expected range for trade growth in 2018 runs from 2.1 percent to 4 percent.

Azevedo said the WTO was hoping for greater stability in the world economy, and alluded to lingering uncertainty about trade policy in the US, the world’s largest economy, under President Donald Trump.

“We are still waiting to see how the trade policy itself is going to shape up in the United States,” Azevedo said. He said the WTO is waiting for a US trade representative to be confirmed, “so we can have a more meaningful dialog” with the US.

The Trump administration has nominated Robert Lighthizer to become US trade representative.

Azevedo said the “poor performance” in world trade growth last year was mostly due to a “significant slowdown in emerging markets, where imports basically stagnated last year.” A drop in commodity prices partially doused demand in those markets.


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