World trade plummets by 12%

Global trade flows contracted by a catastrophic 12% in 2009, the fastest pace since the second world war, Pascal Lamy, director general of the World Trade Organisation revealed today, as he urged its 153 member countries to breathe new life into the ailing Doha trade round. This latest estimate is considerably worse than the WTO's previous forecast of a 10% decline for last year, underlining the hefty costs of the financial crisis for the world economy. "The main explanation for this freefall in trade has been the simultaneous reduction in aggregate demand across all major world economies," Lamy told a conference in Brussels.