California Apparel News

The World Trade Organization has downgraded its forecast for trade growth in 2013 and 2014, due primarily to the ongoing recession in Europe.

Originally, the WTO in April had expected global trade to increase 3.3 percent this year, but that has been revised to 2.5 percent. The forecast for 2014 has also been changed. Instead of a 5 percent growth, it should be around 4.5 percent.

Import statistics show that the developing countries have been more active in trade, bringing in more goods to their country compared with the developed countries. On the other hand, data from Europe, the United States, Japan and China indicate that the economic slowdown has bottomed out and a recovery is on the way.

Developing economies’ imports were up 5.8 percent in the first half of 2013 compared with the same period last year. Meanwhile, Europe’s imports fell 2 percent during the first half of 2013 compared with 2012.

“Although the trade slowdown was mostly caused by adverse macroeconomic shocks, there are strong indications that protectionism has also played a part and is now taking new forms, which are harder to detect,” said WTO Director General Roberto Azevedo. “Fortunately, there is something we can do about this. Negotiations under way in Geneva can address these problems, facilitating greater trade and opportunities to spur economic growth.”

Encouraging economic signs are that the European sovereign debt crisis has eased significantly since last year, unemployment in the United States is down to 7.3 percent from a recent high of 10 percent, and the growth in Japan’s gross domestic product has accelerated since the adoption of new fiscal and monetary policies.

Still, Europe, which consumes roughly one-third of the world’s trade goods, maintains a high unemployment rate that is likely to remain at or near record levels for some time. Trade for that region is expected to be at below-average levels (average being 5.4 percent) for the next coming quarters.