The WTO warned on Wednesday of rising protectionism amid the economic crisis as it sharply cut its forecast for trade volumes of developed and developing economies this year.
Making its latest assessment of the global economic situation, the WTO also observed that the sharp contraction of the global economy registered in the first quarter of this year “appears to be slowing down.”
However, citing risks including rising unemployment and oil prices, the organization revised its forecast of global trade contraction to 10 percent from its March forecast of a shrinkage of 9 percent.
Trading volumes of developed economies are now expected to shrink by 14 percent instead of 10 percent, while those of developing economies would contract 7 percent, rather than the earlier forecast of between 2 percent and 3 percent.
Amid the economic crisis, the WTO said in its report to member states that there has been a growing number of instances of protectionism.
“In the past three months, there has been further slippage towards more trade restricting and distorting policies,” it said in the report.
The WTO said that “resort to high intensity protectionist measures has been contained overall, albeit with difficulties.”
It said that even without taking into account trade measures put in place because of the swine flu pandemic, there were more than twice as many new trade barriers introduced than new trade liberalizing measures.
It said restrictions related to the A(H1N1) flu pandemic has been “most noticeable,” listing at least 39 member states which have imposed measures such as import bans on pork products from swine flu-affected countries.
“A worsening of the A(H1N1) flu pandemic could also create further downside risk to global economic recovery,” it said.
The WTO also raised renewed concerns over stimulus programs put in place by governments in a bid to lift economies out of the recession.
It said that there is “very limited information that is available publicly” on these programs, therefore, it is difficult to assess how these measures could distort markets and competition.
In addition, it is unclear when support or subsidies provided by the state to prop up ailing industries such as automobile or banking would be withdrawn when the problems are dealt with.
“An important consideration for the G20 countries, therefore, is to design and announce as soon as possible an exit strategy from their crisis measures that will allow world markets to return to normal again,” it said.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
STUMPED: KMT and TPP lawmakers approved a resolution to suspend the rate hike, which the government said was unavoidable in view of rising global energy costs The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates. Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT. Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures. A government-organized electricity price evaluation board in March
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has
China is mischaracterizing UN Resolution 2758 for its own interests by conflating it with its “one China” principle, US Deputy Assistant Secretary for China and Taiwan Mark Lambert said on Monday. Speaking at a seminar held by the German Marshall Fund, Lambert called for support for Taiwan’s meaningful participation in the international community at a time when China is increasingly misusing Resolution 2758. The resolution had a clear impact when it changed who occupied the China seat at the UN, Lambert said. “Today, however, the PRC [People’s Republic of China] increasingly mischaracterizes and misuses Resolution 2758 to serve its own interests,” Lambert said. “Beijing