MercoPress. South Atlantic News Agency

World trade drops 12% in 2009; re-launching Doha round “imperative”

WTO Secretary General Pascal Lamy in Brussels

World Trade Organisation director-general Pascal Lamy said on Wednesday that international trade fell by 12% in 2009, a marked deterioration on previous estimates which put the drop closer to 10%.

Completion of the stalled Doha round of multilateral trade talks is therefore more necessary than ever, said Lamy at an event organised by the European Policy Centre in Brussels.

“If there was a geopolitical consensus in launching the Doha development round in 2001 ...it is today economically imperative to complete it,” he said.

Originally designed to reduce barriers to trade for the world's poorer nations, the talks have become bogged down over the issue of US and EU farm subsidies and access to developing markets such as China and India.

The round's slow progress, coupled with a breakdown in UN climate talks in Copenhagen last December, have led some analysts and policy-makers to question the future of multilateral negotiations.

Questioned on his expectations for this year, Mr Lamy said he expected there would be “pick-up” in trade levels. “Whether is short-term due to re-stocking, or long-term due to sustained demand ...it is too soon to say,” he cautioned.

Addressing EU concerns over a rise in non-tariff barriers in countries such as China, the former EU trade commissioner said this was an “inevitable” result of development in these countries, citing increased demand in product labelling by Chinese consumers as an example.

But he added that regional requirements must be justified and based on real science and not an excuse to introduce protectionism by the backdoor.

Certain European businesses have increasingly complained that they are being shut out from the Chinese market by an ever growing list of certification requirements, with technology companies in particular feeling the squeeze.

Attention was drawn to the sector last month after Google said the cost of doing business in China may have become too high, leading the US giant to speculate on a possible pullout.