Courtesy of the Hindu Business Line site, I came across the above-linked article that suggests the WTO is forecasting a 9% fall in global trade in 2009. But what is most interesting about this number are some of the assumptions and thoughts below the surface. To wit, the Director-General of the WTO believes that "as demand falls sharply overall, trade would fall even further with the depleted pool of funds available for trade financing further contributing to the significant decline in trade flows, in particular in developing countries." "Protectionism" is also a rising concern for getting global trade back on track, the WTO warns. In my view, world governments are going to be forced to make tough decisions that fly in the face of rising populism when it comes to keeping borders open. Considering both falling global demand and a tough trade finance climate, maintaining open borders is about the only hope we have for keeping the global sourcing option open at the levels it has been in recent years.
- Jason Busch