WEF warns against protectionism as trade volumes dive

Projections of falling world trade volumes in 2009 are deeply worrying and demand urgent action. That’s according to the World Economic Forum’s (WEF’s) Summit on the Global Agenda held in Dubai earlier this month. It was noted that anxiety to resolve the current financial crisis must not create complacency about international trade as the effects of the crisis are already being felt in escalating trade finance costs and falling freight volumes. Recommendations from the summit included the immediate support for an open trade regime by world leaders, as “it is crucial for all governments to resist the temptation to raise trade restrictions in response to declining growth and job losses as the experience of the 1930s depression proved that protectionist trade policy will only make matters worse.” The commercial and economic costs of poor trade facilitation are high, therefore the summit recommended that the Doha Trade Negotiations be concluded urgently. This includes an ambitious new multilateral agreement on trade facilitation that is already in a very advanced stage of completion. If it is delayed, serious consideration should be given to concluding the trade facilitation negotiations and implementing them immediately on a provisional basis. It was stressed that development agencies at the multilateral and regional levels must take advantage of additional aid for trade to deliver capacity building for trade facilitation as this is not a role for the World Trade Organisation (WTO).