31 March 2009


Jim Rollo

Deputy Director, UK Trade Policy Observatory, and Associate Fellow, Global Economy and Finance, Chatham House

Peter Holmes


  • The collapse of world trade is threatening to create a negative feedback loop to the global economy. Some countries have seen their trade fall by 30-50% in the year to February 2009, a bigger fall than between 1929 and 1930. Annual figures for world trade in 2008 show a big fall in the fourth quarter - a trend that has been accelerating.
  • The world's trade ministers have failed to get the Doha Development Agenda back on track, despite direct instructions from the G20 leaders to do so quickly after the November summit in Washington, DC. This failure sends a very powerful negative signal about the G20's lack of policy coordination on even bigger issues.
  • There is a two-way interaction between trade and the macro-economy at a national and global level. The current crisis is threatening countries that rely on export-led growth, a strategy that has led billions out of poverty.
  • It is imperative for there to be recognition that the current shrinkage in global trade is a macro-economic problem requiring macro-economic solutions, and that the necessary actions must be coordinated.