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By Brian Flood
Trade expansion will continue to soften in the third quarter of 2018, due in part to a slowing of export orders and auto sales, the World Trade Organization predicted in a report released Aug. 9.
Ultimately, this “loss of momentum” may reflect a “ratcheting up of trade tensions,” the report said, the latest warning from the global body against a rise of trade protectionism.
The WTO said the findings of the World Trade Outlook Indicator are broadly in line with previous forecasts, which predicted that merchandise trade growth would slow from 4.7 percent in 2017 to 4.4 percent in 2018.
“Rising trade tensions continue to pose risks to the trade forecast and will be monitored closely going forward,” the WTO said.
Trade in agricultural raw materials was the only index that saw significant improvement from the WTO report about second quarter growth, which was released in April. Projections for trade in electronic components and automobiles, container port throughput, and international air freight saw little change or were downgraded, the WTO data showed.
The WTO’s warning on automobile trade comes at a time the Trump administration has already slapped new duties on steel and aluminum imports, and is publicly mulling new tariffs on imported cars and auto parts. Commerce Secretary Wilbur Ross said his agency will hold off on the auto tariffs while trade negotiations between the U.S. and European Union are ongoing.
The WTO is increasingly sounding the alarm about the rise of anti-free trade sentiment. “World Trade Organization data show a marked escalation of trade restrictive-measures over the past six months,” WTO Director-General Roberto Azevedo wrote in an Aug. 9 opinion piece.
“The situation is extremely serious. Reciprocal trade restrictions cannot be the new normal. A continued escalation would risk a major economic impact, threatening jobs and growth in all countries and hitting the poorest the hardest,” Azevedo warned.
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