* 2012 world goods trade grew well below pre-crisis average
* WTO cuts 2013 growth estimate for world goods trade
* 2014 growth in world trade in goods estimated at 5 pct
* Lamy warns of threat of protectionism
By Tom Miles
GENEVA, April 10 The World Trade Organization
slashed its forecast for trade growth in 2013 on Wednesday,
saying it feared protectionism was on the increase.
It cut its forecast for global trade growth in 2013 to 3.3
percent from 4.5 percent and said trade grew only 2.0 percent in
2012. That was the smallest annual rise since records began in
1981 and the second weakest figure on record after 2009, when
Trade in commercial services also grew by only 2 percent in
2012, to $4.3 trillion.
WTO Director General Pascal Lamy warned that 2013 could turn
out even weaker than expected, especially because of risks from
the euro crisis, and countries might try to restrict trade
further in a desperate attempt to shore up domestic growth.
"The threat of protectionism may be greater now than at any
time since the start of the crisis, since other policies to
restore growth have been tried and found wanting," he said.
Lamy, who will step down at the end of August this year,
called the 2012 growth rate "sobering".
"It's clear that conventional monetary and fiscal policies
have failed to produce satisfactory results," he told a news
conference at the WTO headquarters in Geneva.
With conventional thinking set against loosening budgets and
uncertainty about the benefits of "ever more unconventional"
monetary policies, Lamy said that liberalising trade remained a
"good bet at a modest cost", although he said the political cost
of reforming was sometimes high.
Asked if he counted Japan's monetary easing as a
protectionist policy, Lamy said its use was fine as long as it
was coordinated, and the countries belonging to the G20 group
had agreed not to "go it alone" with easing to gain an
comparative advantage for their own exports.
"Whether or not they will walk the talk, we will see," he
told a news conference at the WTO headquarters in Geneva.
"So far in my view, the major impact of this innovative
quantitative easing has been more on capital flows, on interest
rates, than on trade - although one could say that impact on
capital flows and interest rates may, in a second round of
calculations, impact currency or an economy's competitiveness."
Despite the hope of quickening trade this year and a
provisional forecast of 5.0 percent growth in 2014, the annual
rises are expected to stay below the historical trend of
long-term growth, which was 6.0 percent for the 20 years leading
up to the financial crisis but now stands at 5.3 percent.
"Traditionally we've reckoned on a 2:1 ratio of trade growth
to GDP (gross domestic product) growth. This year it was 1:1 and
we would expect to see that relationship re-establish itself,"
said the WTO's chief economist Patrick Low.
The WTO forecasts are based on global GDP growth of 2.1
percent in 2013, a consensus estimate that the WTO said was
unchanged from 2012.
"Risks to the forecast are firmly rooted on the downside and
are mostly linked to the sovereign debt crisis in Europe," the
WTO said in a statement.