World trade suffers biggest drop since 1945

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World trade suffers biggest drop since 1945​

World trade fell by 12 per cent last year — the biggest drop since the Second World War — according to the World Trade Organisation (WTO).

The level of trade between nations had been expected to decline by 10 per cent in 2009.

Pascal Lamy, the director-general of the WTO, said the sharp fall made it “economically imperative" to conclude the Doha Round international trade talks this year.

The negotiations, which began in 2001 and are currently at a standstill, are aimed at removing barriers to trade for poor nations by striking a deal that would cut agriculture subsidies and tariffs on industrial goods.


The figures emerged as official figures confirmed that the German economy, the biggest in Europe, had stagnated in the fourth quarter of last year after 0.7 per cent growth in GDP between July and September, adding further pressure to the euro, which has been battered by recent weeks over Greece's ability to reduce its debt.

It also dimmed hopes that Germany might be able to bail out Greece.

Germany's public deficit was also revised upwards to €79.3 billion (£70 billion), or 3.3 per cent of GDP, from an initial estimate of 3.2 per cent.

Under the European Union’s Stability and Growth Pact, EU members are supposed to run deficits no larger than 3 per cent of GDP, and work towards a balance or even a surplus in times of economic growth.

The euro has fallen by 10 per cent against the dollar since the end of November amid growing worries about the debt problems of Greece and other highly indebted eurozone countries, such as Portugal and Spain.

Today the common currency was edging up, although, at $1.3544, it is still trading only a cent above an eight-month low reached last week of $1.3442.

World trade suffers biggest drop since 1945 - Times Online