The report also warned that estimates of the expected recovery in 2021 remain gravely uncertain, with outcomes depending significantly on the duration of the outbreak and the effectiveness of policy responses by nations. If the pessimistic scenario comes to fruition, it could be the most precipitous drop in global commerce since the Great Depression.
“It should be remembered that global trade
was already in a difficult position when the pandemic struck and the after effects of trade tensions between the United States and China were already expected to continue for a large part of 2020,” said WTO Director-General Roberto Azevedo.
The WTO has also warned that developing economies would require assistance given that the current crisis has hit almost all sectors. But trade will likely be affected more in sectors with complex value chains, particularly electronics and automotive products, it said. However, globally services trade may be most directly affected by Covid-19 through overarching transport and travel restrictions.
Merchandise trade volume already fell by 0.1 per cent in 2019, weighed down by trade tensions and slowing economic growth. Global merchandise exports in 2019 fell by 3 per cent to $18.89 trillion, while the value of commercial services exports rose a modest 2 per cent to $6.03 trillion in 2019.
India’s exports had caught a rare breather in February, rising after six months before Covid-19 struck. After February’s modest 2.91 per cent growth, total exports stood at $292 billion in the first 11 months of financial year 2019-20 (FY 20). Imports declined in nine of 11 months for FY20, leading to a 7.30 per cent drop at $436.03 billion over the period.
Closely watched for its detailed forecast of trade movement across sectors, the annual report has chosen to avoid making hard predictions. “Whole sectors of national economies have been shut down, including hotels, restaurants, non-essential retail trade, tourism and significant shares of manufacturing. Under these circumstances, forecasting requires strong assumptions about the progress of the disease and a greater reliance on estimated rather than reported data,” it said.