Rising Protectionism Prompts WTO to Cut Trade Forecast

Summary: The WTO has cited a significant increase in member countries protectionism especially during time of economic crisis, says it will cut it trade volume forecast starting this month

The organization also said that the economy in the global scale appears to be slowing down.

 The World Trade Organization (WTO) on Wednesday released its recent report showing a significant drop on the global trade contraction as it warned rising protectionism from countries affected by the global economic crisis.

Based on the report, the global economy in the Q1 of 2009 has been slowing down as global contraction registered to only 10.0 percent compared to last month’s 9.0 percent. WTO attributed the slow recovery to continue jobs cuts, high fuel prices, and high-risk housing projects.

The organization that as this develops, member countries, whether developed or developing will have a rising protectionism issues. These countries will try to restrict further its trade and will try to distort policies in order for them to control the economic situation in their own country.

The WTO also said that due to swine flu case all over the world, the trade measure have been doubled which makes it harder for economies to have a free flow of products. The barriers of trade have been doubled.

The A(H1N1) can also be blamed for the slowdown of the economic recovery as import bans on pork and other pork-based products impacts at least 39 member countries.

WTO also blamed stimulus programs placed by governments, saying that it is nearly impossible to assess the distortion it can cause to the market.