Recent Trends in World Trade and International Negotiations

Abstract

World trade in 2009 was dominated by the worst financial and economic crisis in decades. Global output shrank. So did the volume of international trade. Despite bearing no responsibility for the crisis, the poorer developing countries have fared the worst. China, Brazil and India saw exports drop by between a fifth and a third in the second half of 2008, but countries not belonging to the top 20 developing country exporters were hit even harder. Trade and GDP growth have started to pick up again, but some economists fear a “double-dip” recession. If unemployment continues to grow, it may become harder for governments to resist protectionist pressures. In terms of the WTO negotiations, the crisis cuts both ways. Governments are preoccupied with more immediate concerns. But the crisis has shattered the sense that protectionism was unthinkable, making a trade deal seem more valuable. The G-20 major economies have called for concluding the Doha Round in 2010, but it remains to be seen whether this pledge will amount to anything. The number of bilateral trade deals continues to grow, with Switzerland an enthusiastic participant. Some of these deals have been criticised for “WTO-plus” obligations, particularly regarding intellectual property. Meanwhile, there are real grounds for arguing that the Doha Round agenda does not reflect many current problems, especially climate change. With the US and the EU threatening to impose tariffs on exports from emerging economies with no hard emissions caps, it is clear that governments need to find some way of discussing the new challenges confronting the global economy.