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f the global economy recovers as expected and governments pursue the right policy mix, growth in the volume of world merchandise trade is predicted to rebound this year from its tepid performance in 2016.Last September, we issued an updated forecast, warning that world trade in 2016 would grow at the slowest pace since the financial crisis. This turned out to be accurate. The final figure for the year was 1.3 per cent — below even our revised estimate of 1.7 per cent, which itself was already below the estimates of other institutions. The poor performance over the year was largely due to the slowdown in emerging markets, where imports stagnated last year, barely growing in volume terms. In 2016, the dollar value of world merchandise trade fell for the second year in a row, as exports dropped 3.3 per cent to US$15.46 trillion. The decline was less severe than in 2015, when trade fell 13.5 per cent in value terms. These movements were due to major shifts in commodity prices and exchange rates which came mainly in 2015, but some effects were still evident in 2016. THE OUTLOOK FOR WORLD TRADE IN 2017 AND BEYOND A number of early indicators point to a recovery in trade growth in 2017. For example, container port throughput has climbed to a record high and figures on global export orders are at their highest level in several years.These factors, combined with an expected recovery in global GDP, give some cause for cautious optimism. The WTO therefore expects world trade growth to rebound to 2.4 per cent in 2017. However, because of the high level of economic and policy uncertainty, we are placing this figure within a range from 1.8 to 3.6 per cent.Hitting the 2.4 per cent forecast assumes that governments pursue an appropriate mix of policies and that GDP forecasts will be accurate. A more pronounced improvement in economic circumstances would be required to push trade growth towards the higher end of the range. On the other hand, unforeseen changes to monetary, fiscal and trade policies could lead to results closer to the low end of the range. Looking ahead to 2018, we are forecasting trade growth between 2.1 and 4.0 per cent. Again, this is subject to the same uncertainties. In recent years, we have been keeping a close eye on the ratio between trade and GDP growth. In 2016, the ratio fell to 0.6. This is the first time that the ratio has fallen below 1 to 1 since 2001. It is expected to recover partly in 2017 but our expectation is that it will remain well below the post-war average of around 1.5 to 1.Overall, I think that while there are some reasons for cautious optimism, trade growth remains fragile and there are considerable risks to the downside. Much of the uncertainty around the outlook is of course political — and not only geopolitical. Part of this is driven by people’s concerns about the impact that trade can have. The fact is that trade plays a very beneficial role in the economy overall. It is net positive. It drives growth, job creation and development. Nevertheless, people’s ROBERTO AZEVÊDO, DIRECTOR-GENERAL, WORD TRADE ORGANIZATION (WTO)TRADE GROWTH FORECASTS AMID POLICY UNCERTAINTY“MORE TRADE INTEGRATION CAN HELP MAKE THE SYSTEM MORE INCLUSIVE – CONNECTING NEW INDUSTRIES AND SMALLER PLAYERS TO NEW MARKETS ”I080 TRADE