New Finance Rules Have Potential to Alter the Path of Global Trade |
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May 14,2009
If this proves to be the moment when the march toward ever-greater globalization and trade ends or slows significantly, look not only to tariffs or buy-American rules or street protests as the causes. Look also to changes now being contemplated in rules for global finance.
If this proves to be the moment when the march toward ever-greater globalization and trade ends or slows significantly, look not only to tariffs or buy-American rules or street protests as the causes. Look also to changes now being contemplated in rules for global finance.
The collapse of world trade was more abrupt than friends or foes of globalization imagined possible. The World Trade Organization says the volume of trade -- an estimate adjusted to remove effects of price and currency changes -- will fall 9% this year, the most severe contraction since World War II.
The International Monetary Fund is even gloomier. It foresees an 11% decline in trade in goods and services this year. For "advanced economies" -- the U.S., Canada, Europe, Japan and the export powers of Asia -- it anticipates a 13.5% decline in exports this year. For emerging and developing countries, even more dependent on exports for growth, it expects a 6.4% decline in exports, a sharp contrast to the 9.5% increase they enjoyed in 2007 and the 6% increase seen in 2008.
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