Main menu

Pages

Organization: World Trade is preparing for an unequal strong recovery after the Corona shock



The World Trade Organization expects that world trade indicators will witness a strong and unequal recovery during the coming period due to the shock caused by the (Corona) epidemic.

The organization confirmed - in a report on world trade indicators today, Wednesday - that the prospects for a rapid recovery in world trade have improved, and that merchandise trade expanded more quickly than expected in the second half of last year, and indicated that according to the new estimates, the volume of merchandise trade is expected to increase. Global by 8.0% in 2021 after declining by 5.3% in 2020, continuing its recovery following the collapse caused by the epidemic that brought it to its lowest level in the second quarter of last year.

The report said, "It is assumed that trade growth will slow down to 4.0% in 2022 as the effects of the epidemic continue to be felt, especially that despite the expected pace of expansion, trade will remain below its trend before the spread of the epidemic." Globalization is marred by regional disparities, persistent weakness in services trade, and delayed vaccination schedules, especially in poor countries, which could easily undermine any hoped-for recovery.

The report quoted the Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, as saying that the strong recovery in global trade since the middle of last year helped alleviate the impact of the epidemic on individuals, companies and economies, and her assertion that keeping international markets open will be necessary for economies to recover from this crisis and that the launch of a rapid vaccine. Global and equitable is a prerequisite for achieving the strong and sustainable recovery the world needs.

The Director-General of the World Trade Organization pointed out that trade through value chains helped countries obtain food and basic medical supplies during the crisis, and said that the manufacture of vaccines requires inputs from many different countries as one of the pioneering vaccines includes 280 components obtained from 19 different countries. .

She noted that trade restrictions make it difficult to increase production, and that the World Trade Organization has helped keep trade flowing during the crisis and the international community must leverage the power of trade to expand access to life-saving vaccines.

The World Trade Organization report indicated that global GDP at market exchange rates should increase by 5.1% during 2021 and 3.8% during 2022 after a contraction of 3.8% during 2020, and pointed out that trade in goods at the face value of the dollar decreased during 2020. By 7%, while exports of commercial services decreased by 20%.

He stressed that the drop in oil prices led to a 35% contraction in fuel trade during 2020, while travel services decreased by 63% in 2020, while he is not expected to fully recover until the epidemic fades.

He noted that the intensification of vaccine production would allow companies and schools to reopen more quickly and help economies get back on their feet again, and warned that as long as large numbers of people and countries are excluded from obtaining adequate vaccines, growth will stifle growth and risk reversing the trend of health and economic recovery in all. around the world.

He said that the short-term risks of the forecasts tend to strongly to the negative side and focus on factors related to the epidemic, including insufficient production and distribution of vaccines or the emergence of new strains of the virus resistant to vaccines, noting that in the medium to long term, public debt and deficits could affect economic growth and trade. Especially in highly indebted developing countries.

He added that there are two alternative scenarios for trade; The first is for the production and deployment of vaccines to accelerate, which will allow the containment measures to be eased sooner, which is expected to add about one percentage point to global GDP growth and about 2.5 percentage points for the growth of global merchandise trade in 2021, as trade will return to its previous trend of the epidemic by Fourth quarter of 2021.

The report stated that the second scenario is that vaccine production does not keep pace with demand and / or the emergence of new types of virus against which vaccines are less effective, as such an outcome could reduce one percentage point of global GDP growth in 2021 and reduce trade growth by two percentage points.

He said that during the current year 2021, the demand for traded goods will be driven by North America (11.4%) thanks to the huge tax injection in the United States, which should also stimulate other economies through the trade channel, as both Europe and South America will witness growth in imports by about 8 While other countries will witness growth in imports, as regions will record smaller increases, the report added that Asia will meet much of the global demand for imports, as exports from them are expected to grow by 8.4% in 2021, and European exports will increase by almost the same amount (8.3%).

He added that shipments from North America will witness a smaller increase (7.7%), noting that strong expectations for export growth in Africa (8.1%) and the Middle East (12.4%) will depend on increased travel expenditures throughout the year, which will boost oil demand at the same time. South America will see weaker export growth (3.2%), as will the Commonwealth of Independent States, including some former members and associates, at 4.4%.

reactions

Comments