World Trade Organization (WTO) members put restrictive measures on about $580 billion worth of trade in 2018, more than seven times the level of 2017, WTO Director-General Roberto Azevedo said Thursday in Washington, D.C.
Global trade growth decreased from 4.6 percent to 3 percent between 2017 and 2018, as the fourth quarter of last year saw the “biggest drop” in 10 years, Azevedo said. The WTO is forecasting lower growth this year, a rate of 2.6 percent, he said.
“These numbers should surprise no one,” Azevedo said, according to remarks transcribed by the WTO. “Trade simply cannot play its full role in driving GDP growth when levels of uncertainty are so high. Greater uncertainty means lower investment and consumption. Investment, in particular, has a more pronounced impact on trade, and this is reflected in these numbers.”
But there are positive signs that trade could be headed toward a more “positive path,” he said, including reports of progress in U.S.-China talks, the fact that the U.S.-Mexico-Canada Agreement (USMCA) is in its ratification process and the fact that several other major agreements have entered into force or are set to do so in the near future, including the Trans-Pacific Partnership, the EU-Japan Economic Partnership Agreement and the African Continental Free Trade Area.
Despite a potential global trade crisis, WTO members have a “once-in-a-generation opportunity” to reform the multilateral body, he said.
While current reform discussions have “momentum,” some have concerns about the direction that conversations might take, Azevedo said.
“But inaction would compromise the relevance or even the existence of the system as we know it,” he said.
Azevedo said reform should follow three overarching principles in terms of substance: improving notifications and transparency, enhancing the dispute settlement system and addressing the current impasse in appointments to the WTO Appellate Body, and improvements to WTO negotiations.
Further, 77 WTO members accounting for 90 percent of global trade — as part of the Joint Initiative on E-Commerce — currently are setting the stage for the launch of negotiations on new e-commerce rules and disciplines, Azevedo said.