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WTO downgrades global trade growth in 2013 over protectionism fears

WTO downgrades global trade growth in 2013 over protectionism fears
The World Trade Organization has downgraded its forecast for global trade growth in 2013 to 3.3% from 4.5%.

In 2012 the volume of trade grew by only 2.0%, which was the slowest rate since 1981. Trade growth in 2013 could turn weaker due to a tendency towards protectionism in the euro block. The financial crisis might may see Eurozone members try to shore up domestic growth, WTO Director General Pascal Lamy warns.

“The threat of protectionism may be greater now than at any time since the start of the crisis, since other policies to restore growth have been tried and found wanting,” he said. 

The provisional forecast for 2014 is 5.0% and there is still hope trade will spin up. Annual rate rises are expected to stay below the historical long-term growth of 6.0% in the 20 years before the financial crisis hit.

“The events of 2012 should serve as a reminder that the structural flaws in economies that were revealed by the economic crisis have not been fully addressed, despite important progress in some areas,” Mr Lamy said.

“Repairing these fissures needs to be the priority for 2013.”