The World Trade Organization recently released their "World Trade Report 2009." It is very interesting to see what is actually happening to world trade right now. The situation appears to be darkening. After forecasting a 9 percent decline in world merchandise trade just last month, they now foresee a 10 percent decline. It seems as unemployment rises, global demand will be even less.
In the report, Pascal Lamy, the Director-General of the WTO, tells of the general theme of the report this year. “The choice of topic for this year’s World Trade Report is highly relevant to the challenge of ensuring that the channels of trade remain open in the face of economic adversity. Well-balanced contingency measures, designed primarily to deal with a variety of unanticipated market situations, are fundamental to the effectiveness and stability of trade agreements." He wants to make sure countries are using these contingency measures, or protective measures, in good faith. The WTO is very concerned about countries taking protectionist actions. At the recent G-8 Summit, the leaders of 17 countries issued the following joint statement: "We reaffirm our commitment to maintain and promote open markets and reject all protectionist measures in trade and investment." However, there is still cause for concern.
The European Union has recently approved pre-emptive penalties on imports of steel pipe from China. By putting up "antidumping" duties on China's steel industry, multiple industries in the EU will now be vowing to get these same protective tariffs. The funny thing is that just a day later, the EU filed a complaint against the Philippines for taxing imports on distilled spirits such as Scotch whisky and Spanish brandy. It seems as though nations around the world are stepping up protectionist measures.
Finally, my favorite and the situation that gives world trade hope is the one about what beer President Obama is serving at the White House. He invited two men for a meeting that he hopes will promote racial harmony. The problem is one man likes Blue Moon, a beer from London-based SABMiller, and the other likes Red Stripe, which is from London-based Diageo PLC. And the President himself will be drinking Bud Light, which is now owned by Ansuuser-Busch InBev NV, a Belgian-Brazilian giant. All this has many American beer companies hopping mad, and leads me to wonder. At least President Obama is coming through on his promise.