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  • WTO, FIFA sign MoU for economic, social development

    WTO, FIFA sign MoU for economic, social development

    The World Trade Organization (WTO) and the International Federation of Association Football (FIFA) agreed to collaborate by exchanging views of their respective activities and preparing common strategies and projects in areas of shared interest.

    Regarding the WTO’s cotton programme, the WTO and FIFA will explore opportunities to enhance the participation of the “Cotton Four” (C4) countries (Burkina Faso, Benin, Chad and Mali) and other LDC cotton producers in global football apparel value chains.

    The two organizations will also work together in the development of publications, including a joint study on the economic impact of football and its role in unlocking global economic growth potential, and will explore options for the development of capacity-building activities that support the use of football as a tool for women’s empowerment, particularly in LDCs.

    READ MORE: WTO tariff heading proposed for sales tax on services

    Ngozi Okonjo-Iweala, WTO Director-General, said: “I’m really excited at the prospect of collaborating with FIFA to try to leverage the cotton sector in a positive way for poor developing countries such as the Cotton 4. I’m really excited that collaboration with FIFA could help us pull these countries more into the global cotton value chain. I’m also thrilled at the prospect of working on gender empowerment. We have a big sports economy, and to the extent that we can pull this through trade to support women, this is a positive signal.”

    FIFA President Gianni Infantino said: “FIFA redistributes its revenue among our 211 member associations to help them develop football in their countries by notably investing in infrastructure, facilities, competitions, refereeing and coaching. Yet, we believe that there is still more that football can do, especially for the youth in the developing world. This important partnership can help us find ways of ensuring that football can further promote sustainable development for everyone to benefit from the global football economy.”

    On behalf of the C4 countries, as well as Côte d’Ivoire and all the African countries and LDCs that produce and export cotton, Ambassador Ahmad Makaila of the Republic of Chad welcomed this “excellent initiative” undertaken in the framework of the collaboration between FIFA and the WTO.

    “For the C4, signature of the Agreement between the WTO and FIFA strengthens a common vision, an inclusive and lasting partnership and a choice to favour cooperation and negotiation at the WTO in the search for the most appropriate solutions to the cotton issue,” he stated. “This robust cooperation is more than ever indispensable to ensure that our countries bounce back from the many crises we are currently facing, undertake better reconstruction and help achieve the Sustainable Development Goals.”

    Under the Memorandum of Understanding (MoU), which will remain in force until 31 December 2027, the WTO and FIFA will exchange information and expertise on the economic dimension of football, through participation in conferences, regular meetings and contribution to studies. Once a year, a joint review will be undertaken to assess the collaboration and identify specific activities or projects to be implemented the following year. These activities and projects will be reflected in a Collaboration Plan.

  • IMF, WTO call for lifting restriction on medical supplies

    IMF, WTO call for lifting restriction on medical supplies

    KARACHI: Kristalina Georgieva, Manaing Director, International Monetary Fund (IMF) and Roberto Azevêdo, Director General, World Trade Organization on Friday jointly called for governments to refrain from imposing export and other trade restrictions on key medical supplies and food and to quickly lift those put in place since the start of the year.

    Statements issued by IMF and WTO and received here said that as our members grapple with their response to the global health and economic crisis, we call for more attention to the role of open trade policies in defeating the virus, restoring jobs, and reinvigorating economic growth.

    In particular, we are concerned by supply disruptions from the growing use of export restrictions and other actions that limit trade of key medical supplies and food.

    Trade has made cutting-edge medical products available throughout the world at competitive prices. Last year global imports of crucial goods needed in the fight against COVID-19, such as face masks and gloves, hand soap and sanitizer, protective gear, oxygen masks, ventilators, and pulse oximeters, totalled nearly $300 billion.

    Recognizing the importance of this trade, governments have taken dozens of measures to facilitate imports of COVID-related medical products—cutting import duties, curbing customs-clearance processes, and streamlining licensing and approval requirements.

    The world bodies said they welcomed these actions.

    Accelerating imports of critical medical supplies translates into saving lives and livelihoods. Similar attention should be paid to facilitating exports of key items like drugs, protective gear, and ventilators.

    Anticipating governments’ need to address domestic crises, WTO rules allow for temporary export restrictions “applied to prevent or relieve critical shortages” in the exporting country.

    We urge governments to exercise caution when implementing such measures in the present circumstances.

    Taken collectively, export restrictions can be dangerously counterproductive. What makes sense in an isolated emergency can be severely damaging in a global crisis. Such measures disrupt supply chains, depress production, and misdirect scarce, critical products and workers away from where they are most needed. Other governments counter with their own restrictions.

    The result is to prolong and exacerbate the health and economic crisis—with the most serious effects likely on the poorer and more vulnerable countries.

    To ramp up the production of medical supplies, it is essential to build on existing cross-border production and distribution networks.

    Both the bodies are concerned by the decline in the supply of trade finance. Adequate trade finance is important to ensure that imports of food and essential medical equipment reach the economies where they are most needed.

    Our institutions are tracking developments and engaging with key suppliers of trade finance.

    In addition to restrictions on medical goods, curbs on some food items are starting to appear, despite strong supply. The experience in the global financial crisis showed that food export restrictions multiply rapidly across countries and lead to ever greater uncertainties and price increases. We are also concerned that if critical agricultural workers are not able to move to where the harvest is, crops could rot in the fields. Where new cropping seasons are starting, planting could be hampered, lowering both domestic and international supplies and increasing food insecurity. We urge governments to address these challenges in a safe and proportionate manner.

    Amid the unfolding global financial crisis, global economic leaders in 2008 jointly committed to refrain for a year from new import, export, and investment restrictions.

    This pledge helped to avoid widespread trade restrictions that would have worsened the crisis and delayed recovery—just as trade restrictions deepened and prolonged the Great Depression of the 1930’s.

    A similarly bold step is needed today. We call on governments to refrain from imposing or intensifying export and other trade restrictions and to work to promptly remove those put in place since the start of the year. The WTO and the G20 offer two forums for global policy coordination on these important matters.

    History has taught us that keeping markets open helps everyone – especially the world’s poorest people. Let’s act on the lessons we have learned.

  • Global trade may fall up to 32 percent on COVID-19 disruption: WTO

    Global trade may fall up to 32 percent on COVID-19 disruption: WTO

    KARACHI: World trade is expected to fall by between 13 percent and 32 percent in 2020 as the COVID 19 pandemic disrupts normal economic activity and life around the world, said a statement issued by World Trade Organization (WTO) on Wednesday.

    The wide range of possibilities for the predicted decline is explained by the unprecedented nature of this health crisis and the uncertainty around its precise economic impact.

    But WTO economists believe the decline will likely exceed the trade slump brought on by the global financial crisis of 2008‑2009.

    Estimates of the expected recovery in 2021 are equally uncertain, with outcomes depending largely on the duration of the outbreak and the effectiveness of the policy responses.

    “This crisis is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people’s lives,” WTO Director-General Roberto Azevêdo said.

    “The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.”

    “The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies and countries. But policymakers must start planning for the aftermath of the pandemic,” he said.

    “These numbers are ugly – there is no getting around that. But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects. We need to lay the foundations for a strong, sustained and socially inclusive recovery. Trade will be an important ingredient here, along with fiscal and monetary policy. Keeping markets open and predictable, as well as fostering a more generally favourable business environment, will be critical to spur the renewed investment we will need. And if countries work together, we will see a much faster recovery than if each country acts alone.”

    Trade was already slowing in 2019 before the virus struck, weighed down by trade tensions and slowing economic growth. World merchandise trade registered a slight decline for the year of ‑0.1 percent in volume terms after rising by 2.9 percent in the previous year. Meanwhile, the dollar value of world merchandise exports in 2019 fell by 3 percent to US$ 18.89 trillion.

    In contrast, world commercial services trade increased in 2019, with exports in dollar terms rising by 2 percent to US$ 6.03 trillion. The pace of expansion was slower than in 2018, when services trade increased by 9 percent.

  • World services trade to further weaken on coronavirus impact: WTO

    World services trade to further weaken on coronavirus impact: WTO

    KARACHI: World Trade Organization (WTO) has said ongoing weakness in world service trade likely to worsen due to economic impact of the COVID-19 virus.

    “World services trade growth continued to weaken toward the end of 2019 and into the first quarter of 2020,” according to the WTO’s Services Trade Barometer, released on 11 March 2020.

    The latest reading of 96.8 is down from the 98.4 recorded last September and well below the baseline value of 100 for the index, suggesting below-trend growth in world services trade.

    “The indicator does not yet fully capture the economic impact of the COVID-19 virus and is likely to decline further in the coming months.”

    Among the component indices, the largest declines were in passenger air travel (93.5) and container shipping (94.3), growth of which was already moderating before the coronavirus COVID-19 outbreak.

    Both indices cover developments through January and may partly reflect early efforts to halt the spread of the disease, which intensified toward the end of the month.

    The drop in the container shipping index was driven by lower shipping volumes in Asia while the slowdown in passenger air travel was more broad-based, also covering North America, South America and Europe.

    The global financial transactions (97.7) and ICT services (97.0) indices also dipped below trend, while the construction index (99.8) appears to have held steady.

    The global services Purchasing Managers’ Index (96.1) is the most forward-looking barometer component, reflecting expectations that COVID-19 is likely to continue to weigh on services trade in the near-term.

    An approximate measure of the volume of world services trade shows that year-on-year growth in services trade activity already fell from 4.7 percent in the first quarter of 2019 to 2.8 percent in the third quarter.

    The Services Trade Barometer highlights turning points and changing patterns in world services trade. Unlike its counterpart for goods, the fluctuations registered by the services indicator coincide with movements in actual trade flows, rather than anticipating them.

    Readings of 100 indicate growth in line with medium-term trends. Readings greater than 100 suggest above-trend growth while those below 100 indicate the opposite.

  • Trade restrictions increase to historic high levels: WTO

    Trade restrictions increase to historic high levels: WTO

    KARACHI: The World Trade Organization (WTO) has observed that trade restrictions have increased to historic high levels. The Director-General’s annual overview of trade-related developments discussed on 12 December at a meeting of the Trade Policy Review Body shows that trade restrictions by WTO members continue at historically high levels.

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  • WTO sharply downgrades global trade growth forecast

    WTO sharply downgrades global trade growth forecast

    KARACHI: World Trade Organization (WTO) has sharply downgraded the global trade growth forecast for 2019 and 2020.

    “World merchandise trade volumes are now expected to rise by only 1.2 percent in 2019, substantially slower than the 2.6 percent growth forecast in April,” the WTO said in a press release on Tuesday.

    The projected increase in 2020 is now 2.7 percent, down from 3.0 percent previously.

    “The economists caution that downside risks remain high and that the 2020 projection depends on a return to more normal trade relations,” it added.

    “The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” said WTO Director-General Roberto Azevêdo.

    “Job creation may also be hampered as firms employ fewer workers to produce goods and services for export.”

    “Resolving trade disagreements would allow WTO members to avoid such costs,” the WTO Director-General added.

    “The multilateral trading system remains the most important global forum for settling differences and providing solutions for the challenges of the 21st century global economy. Members should work together in a spirit of cooperation to reform the WTO and make it even stronger and more effective.”

    The updated trade forecast is based on consensus estimates of world GDP growth of 2.3 percent at market exchange rates for both 2019 and 2020, down from 2.6 percent previously.

    Slowing economic growth is partly due to rising trade tensions but also reflects country-specific cyclical and structural factors, including the shifting monetary policy stance in developed economies and Brexit-related uncertainty in the European Union.

    Macroeconomic risks are firmly tilted to the downside.

    Due to the high degree of uncertainty associated with trade forecasts under current conditions, the estimated growth rate for world trade in 2019 is placed within a range of 0.5 percent to 1.6 percent.

    Trade growth could fall below this range if trade tensions continue to build, or outperform it if they start to recede.

    The range of likely values is wider for 2020, ranging from 1.7 percent to 3.7 percent, with better outcomes depending on an easing of trade tensions.

    Risks to the forecast are heavily weighted to the downside and dominated by trade policy. Further rounds of tariffs and retaliation could produce a destructive cycle of recrimination. Shifting monetary and fiscal policies could destabilize volatile financial markets.

    A sharper slowing of the global economy could produce an even bigger downturn in trade. Finally, a disorderly Brexit could have a significant regional impact, mostly confined to Europe.

  • Indicator suggests further weakening of goods trade into third quarter: WTO

    Indicator suggests further weakening of goods trade into third quarter: WTO

    KARACHI: The growth of world merchandise trade volumes is likely to remain weak in the third quarter of 2019 according to the WTO’s Goods Trade Barometer, released on Thursday.

    The latest reading of 95.7 from the barometer, formerly the World Trade Outlook Indicator (WTOI), is lower than the previous release and signals that stronger trade growth is not yet in sight.

    The latest reading continues to fall well below the baseline value of 100 for the index of the renamed barometer, which features a design revamp ahead of the launch of a new Services Trade Barometer in September.

    The loss of momentum in goods trade has already been confirmed in previous quarters where official data are available.

    The barometer suggests that below-trend expansion in merchandise trade will persist in the coming months.

    Sustained weakness in the barometer index was driven by below trend values in all component indices.

    The international air freight (91.4) and electronic components (90.7) indices showed the strongest deviations from trend, with readings well below previous releases.

    Indices for export orders (97.5), automobile production and sales (93.5) and agricultural raw materials (97.1) all remained below trend although they show some signs of having bottomed out.

    Only the index for container shipping (99.0) was close to the baseline value of 100.

    Last month, the Director-General’s mid-year report underlined that trade flows hit by new restrictions continued to be at historically high levels between mid-October 2018 and mid-May 2019.

    Tensions leading to higher trade barriers and greater uncertainty pose significant downside risks to trade growth forecasts.

    The Goods Trade Barometer provides, as the WTOI did, “real time” information on the trajectory of world trade relative to recent trends.

    It aims to identify turning points and gauge momentum in global trade growth. As such, it complements trade statistics and forecasts from the WTO and other organizations.

    Readings of 100 indicate growth in line with medium-term trends; readings greater than 100 suggest above-trend growth, while those below 100 indicate below-trend growth.