WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call

[DA60]

'The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.

The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.'

WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call | Reuters


And this Keynesian/Krugmanomics nonsense is primarily to blame, imo.

'Oh yeah..let's bring interest rates to zero and pump tons of money into the economies of the world...that should fix everything in a few months'. - central banks in 2010.

Macroeconomic morons.

 

[backpacker]

So people will consume domestically more than they import/export. Nothing wrong with that.

 

[OrphanSlug]

Right from the OP's report...

"The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors."

In other words, nations looking at trade policy and trade condition have put strain on world trade growth forecasts.

Which has zilch to do with "Keynesian/Krugmanomics nonsense."

 

[joG]

'The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.

The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.'

WTO cuts 2016 world trade growth forecast to 1.7 percent, cites wake-up call | Reuters


And this Keynesian/Krugmanomics nonsense is primarily to blame, imo.

'Oh yeah..let's bring interest rates to zero and pump tons of money into the economies of the world...that should fix everything in a few months'. - central banks in 2010.

Macroeconomic morons.

Well, well. After the debt we have run up and with money so plentiful that interest rates in oecd countries are sometimes already und 0 it should make for interesting times, when the s---t hits the fan and hungry for much of the population.

 

[joG]

So people will consume domestically more than they import/export. Nothing wrong with that.

You are a fine humorist.

 

[chuckiechan]

Right from the OP's report...

"The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors."

In other words, nations looking at trade policy and trade condition have put strain on world trade growth forecasts.

Which has zilch to do with "Keynesian/Krugmanomics nonsense."

Well, the inhabitants are telling their globalist elite politicians, that "Yes, globalism is nice, but not for me".

What good is globalism if you suffer because of it? We've made China rich, and now we are on the brink of war with them.

 

[backpacker]

You are a fine humorist.

I read the article. That is what it states: "The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

Although all governments deny protectionism, trade is no longer outpacing economic growth as it used to. Trade has grown 1.5 times faster than gross domestic product over the long term, and twice as fast when globalization picked up in the 1990s.

This year trade will grow only 80 percent as fast as the global economy, the WTO said, the first reversal of globalization since 2001 and only the second since 1982."

 

[joG]

Right from the OP's report...

"The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors."

In other words, nations looking at trade policy and trade condition have put strain on world trade growth forecasts.

Which has zilch to do with "Keynesian/Krugmanomics nonsense."

I am afraid it all hangs together via the discontent in the population that we are facing from many sides. One of the things worrying people thinking of their old age is calculating an anuity on their savings at near zero interest rates

 

[OrphanSlug]

Well, the inhabitants are telling their globalist elite politicians, that "Yes, globalism is nice, but not for me".

What good is globalism if you suffer because of it? We've made China rich, and now we are on the brink of war with them.

Hysterics aside about our "brink of war" condition with China, the point is the OP blamed the slow down in Global Trade Growth on "And this Keynesian/Krugmanomics nonsense is primarily to blame, imo."

The reality is nations are starting to look at domestic production of goods and services vs. importing goods and services. Call it protectionism or whatever else, but nations are starting to look at the economic consequences of trade deficits. The other reality is growth is still growth even if it is cut in forecast, meaning there is still some expansion of world trade even if the outlook is changed because of various nation political and/or economic objectives.

The WTO is always going to warn about these sort of things, they have a vested interest in globalization. But just because the outlook changed does not mean we or anyone else needs to panic.

 

[backpacker]

I am afraid it all hangs together via the discontent in the population that we are facing from many sides. One of the things worrying people thinking of their old age is calculating an anuity on their savings at near zero interest rates

If you are worried about jobs being exported, or corporations escaping taxes making the debt soar or the ability to service benefit programs challenged, then this is a good sign.

 

[Orly?]

Seems to me Trump knows what he's talking about..

 

[joG]

I read the article. That is what it states: "The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

Although all governments deny protectionism, trade is no longer outpacing economic growth as it used to. Trade has grown 1.5 times faster than gross domestic product over the long term, and twice as fast when globalization picked up in the 1990s.

This year trade will grow only 80 percent as fast as the global economy, the WTO said, the first reversal of globalization since 2001 and only the second since 1982."

When trade flows are reduced on government initiative the optimum traverses to a new one at lower general welfare. So, while it is true that the societies rely more on domestic production, their population does it at a poorer level.

 

[joG]

If you are worried about jobs being exported, or corporations escaping taxes making the debt soar or the ability to service benefit programs challenged, then this is a good sign.

Nope. It is a sign of political systems incompetent at dealing with modern technologies and circumstance. But it will reduce consumption and co2 exhaust, which should make the greens happy.

 

[joG]

Seems to me Trump knows what he's talking about..

Not to this economist it doesn't.

 

[backpacker]

Nope. It is a sign of political systems incompetent at dealing with modern technologies and circumstance. But it will reduce consumption and co2 exhaust, which should make the greens happy.

Sounds to me like they are dealing quite well with the issues of technology and the economy over the longer term.

 

[backpacker]

When trade flows are reduced on government initiative the optimum traverses to a new one at lower general welfare. So, while it is true that the societies rely more on domestic production, their population does it at a poorer level.

People being forced to live within their means is so antiquated a concept, we can't have that can we?

 

[joG]

Sounds to me like they are dealing quite well with the issues of technology and the economy over the longer term.

Yes, I agree. But the pressures on the lower segments of the populations around the OECD with the merchandise trade imbalances are putting strains on societies and their fiscal situations that are pushing political decisions to abandon free trade.

 

[cpwill]

When trade flows are reduced on government initiative the optimum traverses to a new one at lower general welfare. So, while it is true that the societies rely more on domestic production, their population does it at a poorer level.

I've been wondering for some time if I should push this logic to it's final conclusion, and see if I can get anyone to admit that, gosh, if we all went back to subsistence farming, we'd all be richer. Why outsource your shirt-making or house-building jobs to some other family? Think of all the employment!

 

[joG]

People being forced to live within their means is so antiquated a concept, we can't have that can we?

That is true. But it is an archaic and inefficient way to go about it. Very much the last ditch approach.

 

[cpwill]

I am afraid it all hangs together via the discontent in the population that we are facing from many sides. One of the things worrying people thinking of their old age is calculating an anuity on their savings at near zero interest rates

Yup. Good thing the Boomers did a super-duper job of saving for their retirement.

This is one of the reasons I still think there isn't much room for growth in the housing market - a large retiree populace is going to be pulling money out of it for the next decade or two.

 

[joG]

Yup. Good thing the Boomers did a super-duper job of saving for their retirement.

This is one of the reasons I still think there isn't much room for growth in the housing market - a large retiree populace is going to be pulling money out of it for the next decade or two.

That is certainly a part of the problem and closely related to the others like the trade deficits and level of debt accumulation.

 

[backpacker]

Yes, I agree. But the pressures on the lower segments of the populations around the OECD with the merchandise trade imbalances are putting strains on societies and their fiscal situations that are pushing political decisions to abandon free trade.

poor people will have to pay more for low-end items. That creates a market for low end items to be produced domestically. That reduces the number of low-end poor people as they now have another opportunity to work.

 

[cpwill]

poor people will have to pay more for low-end items. That creates a market for low end items to be produced domestically. That reduces the number of low-end poor people as they now have another opportunity to work.

This works. Sorta. You are still net-decreasing their standard of living by raising the cost of living, but you can (I suppose) produce more low-paying jobs.

Until government increases the cost of human labor above the cost of machine labor in those enterprises. Good thing we as a nation have a super-light regulatory state, no minimum wage, and no Obamacare requirements, eh?

 

[joG]

poor people will have to pay more for low-end items. That creates a market for low end items to be produced domestically. That reduces the number of low-end poor people as they now have another opportunity to work.

It might seem that way at first. But, if you model it and do the maths the result is consistently lower general welfare. Anyone that tells you other is a true snake oil salesperson unless they can demonstrate how the loss will be made up. It won't be out of the cancellation of trade alone and will require a means to fix one's problems and so as to return to free trade as well as explain why it should be better than fixing the problems immediately.

 

[backpacker]

It might seem that way at first. But, if you model it and do the maths the result is consistently lower general welfare. Anyone that tells you other is a true snake oil salesperson unless they can demonstrate how the loss will be made up. It won't be out of the cancellation of trade alone and will require a means to fix one's problems and so as to return to free trade as well as explain why it should be better than fixing the problems immediately.

One can have free trade and not be engaged in international trade.