World trade growth set to stay above trend in 2011

Friday, 8 April 2011 02:54 - - {{hitsCtrl.values.hits}}

GENEVA (Reuters) - World trade will grow faster than the 7 percent long-term average rate for a second successive year in 2011 but fall short of last year’s dramatic rebound, the World Trade Organisation is likely to forecast on Thursday.

Forecasts based on a similar model of world trade to that of the WTO by the CPB Netherlands Bureau for Economic Policy Analysis put 2011 merchandise trade growth, as measured by volume of exports, at around 10 percent this year, down from an estimated 15 percent in 2010 when trade volumes roared back after shrinking 13 percent in 2009.

The WTO, which will present its forecast for 2011 at around 1000 GMT, may also revise its estimate of trade growth last year from a forecast of 13.5 percent made in December.

China, the world’s biggest exporter, saw its exports rise 12.9 percent in 2010, but the rate has slowed dramatically in 2011, according to national figures. Nevertheless, CPB economist Gerard van Welzenis said growth in global trade is still being driven by strong emerging market economies.

“Anything above 7 percent -- the long-term pre-crisis average for about 10 years, is a very good performance,” he told Reuters.

WTO Director General Pascal Lamy will present Thursday’s forecasts as he faces growing pressure to deliver progress on the latest round of global trade talks aimed at keeping tariffs, subsidies and other barriers to trade at bay.

The so-called Doha round of WTO negotiations is widely seen as in crisis because they are now almost a decade old, and because failure to secure an agreement this year could leave the talks in limbo as a number of key WTO members enter election years in 2012.

So would a failure of Doha restrict world trade growth?

“Not in the short term,” says van Welzenis of the semi-independent Dutch government body CPB. “But this is a matter for the long run. Even during the (financial) crisis (of 2008-2009) we might have expected governments to raise barriers, but not much happened.”

The WTO and its predecessor The General Agreement on Tariffs and Trade (GATT) had played an important role over the past 50 years, he said. “It’s still important.”