Posted by: mulrickillion | November 11, 2011

WTO | 2011 News items – DDG Rugwabiza warns protectionism will hurt global growth

WTO: 2011 NEWS ITEMS

4 November 2011

DEPUTY DIRECTORS-GENERAL

DDG Rugwabiza warns protectionism will hurt global growth

Deputy Director-General Valentine Rugwabiza, in a speech at the University of Hong Kong on 4 November 2011, warned that “to turn to protectionist trade measures in the current circumstances would be a huge mistake triggering a game of lowest common denominator where the loser will ultimately be global growth”. She added that the influence of Hong Kong, China in the WTO “comes from the fact that she leads by example”.

Good Afternoon Ladies and Gentlemen. I am very pleased to be here today and I express my sincere thanks to Professor Lim for his kind introduction and his support in facilitating today’s address before you.

I am speaking to you at a time of stark global economic uncertainty. Recovery from the financial crisis has been uneven and some may say that proclamations of a quick recovery were premature. Persistent unemployment remains and global growth has slowed.

  The growth of international trade in 2010 led the initial recovery particularly in emerging and developing economies. World trade grew by a record 14.5% in 2010 and exports and imports of developing countries rose above their pre-crisis highs by July 2010. This faster growth was supported by a strong increase in south-south trade in the first half of 2010.  However, the picture has somewhat dimmed.

In October the WTO revised downwards the prospects for world trade in 2011 to 5.8% from the initial prediction of 6.5%. With trade growing more slowly than expected in recent months, rising sovereign debt problems and unsustainable fiscal deficits in many developed economies bruising international confidence, the recovery which we saw at the beginning of the year is being challenged.

And people are reacting.  Over the past few weeks we have all seen images of the ’occupy Wall Street’ protests. Feelings of shared frustration and a lack of confidence in the established national and international systems to deliver on growth and sustainable development are leading to what some commentators are calling the ’global winter’. Coming a few months after the ’Arab spring’, it is becoming increasingly obvious that pockets of consternation in one part of the world can multiply into a global movement.

We are living in a complex, and some would say tumultuous economic space. The stark reality of the world is one where multilateralism is in a precarious position. And yet it is precisely in times of crisis that global cooperation becomes imperative.

Trade remains one of the most important engines of national, regional and global growth.

The relevance of trade to global growth has been confirmed by the experiences of many countries, particularly in Asia. In the aftermath of the crisis in 2008 it was, after all, the Asian economies that led global growth by continuing to keep their markets open and using trade as a policy instrument for recovery.

Actions to the contrary — closing markets, erecting barriers and promoting protectionism — could have had a dramatically different impact. 

We have now moved from a financial crisis to a growth crisis. Many economies are not growing at a pace sufficient to achieve the fiscal consolidation needed to reduce high unemployment. Protectionism, however, is not the answer to these global growth problems we are collectively experiencing. . . .

WTO | 2011 News items – DDG Rugwabiza warns protectionism will hurt global growth

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