“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1 per cent in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” Director-General of the the World Trade Organization (WTO) Ngozi Okonjo-Iweala said
New Delhi: WTO on Thursday said the measures announced by the United States will have substantial implications for world trade and economic growth prospects, and could lead to an overall contraction of around 1 per cent in global merchandise trade volumes this year.
The statement by Director-General of the the World Trade Organization (WTO) Ngozi Okonjo-Iweala follows US decision to impose tariffs on nearly 60 countries.
In a statement, Director-General of the the World Trade Organisation (WTO) Ngozi Okonjo-Iweala said the WTO Secretariat is closely monitoring and analysing measures announced by the United States on April 2.
“Many members have reached out to us and we are actively engaging with them in response to their questions about the potential impact on their economies and the global trading system,” she said, adding that the recent announcements will have substantial implications for global trade and economic growth prospects.
“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1 per cent in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” she said.
The director-general also said he is deeply concerned about this decline and the potential for escalation into a tariff war with a cycle of retaliatory measures that lead to further declines in trade.
“It is important to remember that, despite these new measures, the vast majority of global trade still flows under the WTO’s Most-Favored-Nation (MFN) terms. Our estimates now indicate that this share currently stands at 74 per cent, down from around 80 per cent at the beginning of the year. WTO members must stand together to safeguard these gains,” she said.
According to Iweala trade measures of this magnitude have the potential to create significant trade diversion effects.
“I call on members to manage the resulting pressures responsibly to prevent trade tensions from proliferating,” the statement added.