World Trade Organization said Thursday that it expects strong trade growth through this year and next but warned progress would be "undermined" if governments implement threatened protectionist measures. The WTO forecast 4.4 percent growth in trade volume this year and a more moderate four percent expansion in 2019.But the body''s director-general Roberto Azevedo cautioned that "this important progress could be quickly undermined if governments resort to restrictive trade policies, especially in a tit-for-tat process that could lead to an unmanageable escalation."
"A cycle of retaliation is the last thing the world economy needs," he added in a statement. Last year saw the most robust rise in trade volume expansion since 2011, fuelling hope that the world economy was finally on a sustained path to recovery following the financial crisis. In its latest forecast, the WTO said risks "had appeared to be more balanced than at any time since the financial crisis," but noted that uncertainty was rising again.
Speaking to reporters, Azevedo noted that while some of the announced tariffs remain proposals for now, even the prospect of a further escalation had already effected global market confidence. Asked if he believed the world was currently in the midst of a trade war, the Brazilian-born economist said: "technically, I would say no we are not there yet...
"There are still a number of measures that have been announced but not implemented.... Politically I think we might be seeing the beginning of that (a trade war) and that is exactly what I have been urging members to try to avoid," he said.