World trade to decline 10 percent this year: WTO report

GENEVA, July 22 (Xinhua) -- The World Trade Organization (WTO) has revised further downward its forecast for global merchandise trade this year, expecting a decline in volume of 10 percent, instead of the 9 percent estimate released in March.

"Trade growth will be strongly negative this year. Although this contraction appears to be slowing, the economic situation remains fragile," the WTO said in a press release on Wednesday.

"The response of governments around the world will play a big part in determining the magnitude of this decline and its duration," said the press release, which was issued together with the launch of the WTO's 2009 World Trade Report.

The annual report mainly examines the range of measures in WTO trade agreements that governments may call upon when facing economic difficulties (such as safeguards, anti-dumping, increase in tariffs up to allowed WTO ceilings etc.) and the role that these measures can play.

While those contingency measures may be beneficial in times of crisis, they are not without cost, according to the WTO report.

Such flexible measures can cause trade restrictions and might lead to losses in economic welfare, it said. It added that trade flexibilities may also be used to backslide on previous commitments.

The WTO stressed that since flexibility is not costless, exercising restraint is beneficial. Transparency and effective monitoring may make a decisive contribution to help manage trade policy, especially in adverse economic circumstances.