THERE has been a slowdown in the imposition of new trade restrictive measures by G-20 economies over the past five months. Nevertheless, the new measures are adding to the stock of restrictions put in place since the outbreak of the global crisis, most of which remain in effect. G-20 governments need to redouble their efforts to keep their markets open, and to advance trade opening as a way to counter slowing global economic growth. As noted in previous monitoring reports, trade restrictions and inward-looking policies will only aggravate global problems and risk generating tit-for-tat reactions. The difficulties and concerns generated by the persistence of the global economic crisis, with its many facets, fuel the political and economic pressures put on governments to raise trade barriers. This is not the time to succumb to these pressures.

Moreover, at a time of continuous economic difficulties, trade frictions seem to be increasing. They are reflected not only through trade remedy and dispute settlement cases under the WTO, but also through decisions affecting foreign investment and participation in infrastructure-related government procurement programmes.

Over the past few months, the global economy has encountered increasingly strong headwinds. The outlook for the global economy is worse than at the time of release of the previous G-20 monitoring report due, among other things, to budget developments and the persistent debt crises in some major economies. Output and employment data in many countries have continued to disappoint, despite the many measures implemented to contain the slowdown in economic growth. In the face of these developments, the WTO Secretariat has recently revised downward its forecast for world trade growth in 2012 to 2.5% from its 3.7% forecast issued in April 2012. The volume of trade growth in 2013 is now forecast to be at 4.5%, still below the long-term annual average of 5.4% for the last 20 years.

The trade slowdown in the first half of 2012 was driven by a marked deceleration in imports of developed countries and by a corresponding weakness in the exports of developing economies. For the whole of 2012, merchandise exports from developed countries are expected to grow by 1.5% and those from developing countries by 3.5%.