Why Covid-19 may affect global trade ‘substantially’

World Trade Organization (WTO) says that the impact of Coronavirus may have a ‘substantial’ impact on global economic growth.

The World Economic outlook report by the International Monetary Fund has projected global growth to be at 3.3 per cent in 2020

However, the head of the World Trade Organisation (WTO) Roberto Azevedo on Monday said that he expects the coronavirus epidemic to have “substantial” impact on the global economy, although there are plans for a June ministerial meeting.

Azevedo disclosed this while addressing heads of delegations in a closed-door meeting in Geneva on Monday.

“The effects on the global economy is also likely to be substantial and will start to show up in the trade data in the weeks to come,’’ Azevedo said.

“For MC-12 we are proceeding as planned. Should the situation so demand, we will take any necessary action,” he added, referring to the June ministerial meeting in Kazakhstan.

The meeting, expects member states to clinch deals on agriculture, e-commerce and fisheries subsidies, among other topics, is expected to have several thousand participants.

A successful outcome is considered as critical to the legitimacy and relevance of the global body after the collapse of the WTO’s dispute appeals system due to the U.S. blocking of appointments.

Other member states also voiced concerns about the slow progress on the talks which aim to end harmful subsidies to the fishing industry that are depleting global fish stocks.

Azevedo recently expressed hope that a deal was possible.

“It is incumbent on all of us to recognise that the negotiations are in serious trouble,” U.S. Ambassador to the WTO Dennis Shea told trade delegates on Monday.

Shea added that some members were “fiercely defending” rights to subsidise or do so in the future, without naming the countries.