February 7, 2023

Global Trade to Be Weaker Than Expected, W.T.O. Says

GENEVA – Global trade will be weaker than expected this year as European economies struggle with their debt crisis, and will recover only slightly in 2014, the World Trade Organization said Wednesday.

The global trade body forecast in its annual report that trade would grow 3.3 percent during 2013, significantly less than the 4.5 percent it had earlier predicted.

That would be only a meager improvement from the 2 percent rise in 2012, a terrible year for global trade. Exports were ravaged then by the financial turmoil in the 17-country euro zone, economic aftershocks from Japan’s earthquake and nuclear crisis, and the impact of political unrest in the oil-rich Middle East.

The trade body had earlier forecast a 3.7 percent rise in trade in 2012, based on what a W.T.O. economist, Coleman Nee, described as assumptions that the European Union was ‘’getting its act together’’ financially.

In fact, the debt crisis continued and remains a source of uncertainty for the bloc, the world’s largest economic region.

Trade growth remains well below the 5.3 percent rate it averaged over the last 20 years, the organization said. The figures represent the total volume of merchandise exported across borders, accounting for changes in prices and exchange rates.

The World Trade Organization’s director-general, Pascal Lamy, said ‘’the final trade numbers for 2012 are quite sobering,’’ with developed economies notching a paltry 1 percent increase in their exports last year while shipments from developing economies grew 3.3 percent.

‘’The revival of the sovereign debt crisis in the middle of the year meant that the deceleration of trade was stronger than anticipated,’’ he said.

The disparity between developed and developing economies was still more dramatic on the import side, the figures show. Among developed economies, imports fell 0.1 percent in 2012, while they rose 4.6 percent among developing economies.

For 2014, Mr. Lamy said, trade was expected to rebound to ‘‘more like 5 percent growth,’’ close to the 5.2 percent rate seen in 2011.

The recent slowdown, he said, shows that ‘‘there is a need for more rules-based trade in order to reduce unemployment and to stimulate growth.’’

‘’The threat of protectionism may be greater now than at any time since the start of the crisis, since other policies to restore growth have been tried and found wanting,’’ Mr. Lamy added.

Measured in dollar terms, the total value of merchandise traded in 2012 was $18.3 trillion, essentially unchanged from the year earlier because of falling prices for traded goods like coffee, cotton, iron ore and coal.

Article source: http://www.nytimes.com/2013/04/11/business/economy/global-trade-to-be-weaker-than-expected-wto-says.html?partner=rss&emc=rss

Europeans Claim Partial Victory in Appeal of Airbus-Boeing Case

PARIS — A World Trade Organization appeals panel has overturned a key part of the 2010 ruling that found Airbus benefited from billions of dollars in illegal subsidies, European officials said Wednesday.

The panel’s decision, which was to be released publicly later Wednesday, states that loans from European governments to build the A380 superjumbo jet were not prohibited under global trade rules, according to officials who had seen it.

“The U.S. central claim that Airbus received prohibited export subsidies has been dismissed in its entirety,” Karel De Gucht, the European Union’s trade commissioner, said in a statement. “I am particularly pleased with this important result.”

Mr. De Gucht acknowledged that the trade body had upheld other parts of the earlier decision, including that government support to Airbus had caused its American rival, Boeing, to lose aircraft sales. He insisted, however, that the economic impact of those subsidies was “very limited” and said Brussels would now study the report “to determine the next steps in this dispute.”

The U.S. Trade Representative in Washington was to brief reporters later Wednesday.

But the latest ruling appeared to upend what the Americans had considered the one of the most crucial parts of the landmark case: Namely, that loans Airbus received from Germany, Spain and Britain for the A380 were prohibited because governments expected a significant export market for the twin-deck planes when they granted the support. The United States had hoped to get the loans — known as “launch aid” — banned by the global trade body and to force Airbus to either repay or refinance the loans on ordinary commercial terms.

The W.T.O. defines two broad categories of subsidies: those that are “prohibited” and those that are “actionable” — that is, subject to legal challenge or to countervailing measures such as punitive tariffs. Prohibited subsidies are those which are specifically designed to promote exports or to encourage production using domestically made components. Under W.T.O. rules, any prohibited subsidy must be withdrawn within 90 days of the adoption — by all 153 member states — of a dispute panel’s findings.

Actionable subsidies, meanwhile, are not prohibited per se, but they can be challenged if the complaining country shows that the subsidy caused material injury — a loss of jobs, profit or production capacity — or “adverse effects” to its industry, such as a loss of export market share or sales.

Boeing has contended that the subsidies helped Airbus vault past it in 2003 to become the world’s largest plane maker.

Under the current terms of the government loans, Airbus makes its repayments as its planes are delivered to customers. Airbus has delivered 43 of 244 orders for the A380. The vast majority of those sales have been to non-European customers.

“This is a big win for Europe,” Thomas Enders, the Airbus chief executive, said in a statement. “It is good to see that the WTO has fully green lighted the public-private partnership instruments with France, Germany, Spain and the UK. We now can and will continue this kind of partnership on future development programs.”

Article source: http://feeds.nytimes.com/click.phdo?i=401b944bba15edb0f1b5529c4db3d6a0