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A recent international trade report suggests that the volume of goods exchanged among countries has stopped falling, a hopeful sign that the global economy may soon begin to pull itself out of its sharp downturn.
A government economic research bureau in the Netherlands reported that from May to June of this year, the flow of international trade increased by 2.5 percent. Much of the rise came from exports from Latin America, the Dutch Bureau of Economic Policy Analysis said. Overall, that’s the biggest monthly jump in a year, when trade flows were generally falling due to diminishing demand and restricted bank lending.
International trade and economic growth have dropped sharply following last year’s global financial crisis, as businesses cut back or shut down completely and consumers curtailed spending. Many developing nations that had seen strong growth in the recent boom times from rising demand for the oil, copper and other commodities they produce also felt the squeeze as demand fell.
But despite the recent month’s trade gain, the World Trade Organization, or WTO, the international body that sets rules for trade between nations and settles any such disputes that arise, predicts that for all of 2009 trade will fall sharply, perhaps as much as 10 percent.
Agreement last week then by trade ministers from the world’s leading economies to resume and reinvigorate global trade negotiations could not have come at better time. The so-called Doha Round of trade talks, named for the Persian Gulf city where they were first held, aim to create economic opportunities and development by allowing farmers and others in the developing world greater access to world markets.
Developed and advanced developing nations would open their markets to the benefit of developing and developed countries alike. The United States is seeking a balanced and ambitious conclusion to the Doha round of trade talks that will provide meaningful market access for all involved.
As the global economy continues to struggle, trade ministers including the United States Trade Representative have agreed to work together to reinvigorate the talks. And the Obama Administration has signaled its commitment to the process by announcing its intent to nominate a new ambassador to the WTO, Mr. Michael Punke.