GENEVA — World Trade Organization director-general Pascal Lamy warned Thursday of a significant movement toward protectionist actions by nations around the globe.

This story first appeared in the March 27, 2009 issue of WWD. Subscribe Today.

Lamy said countries have been resorting to hikes in tariffs and nontariff barriers, and bigger use of trade defense instruments such as antidumping measures, in a host of sectors, including textiles, apparel and footwear.

“The main risk is that governments will continue to cede ground to protectionist pressures…as long as the global economic situation continues to deteriorate,” Lamy said in a 46-page report circulated to World Trade Organization member nations that was obtained by WWD.

The WTO chief noted the volume of global trade this year will contract by as much as 9 percent, driven largely by the collapse in global consumer demand and by shortages of trade finance. Lamy stressed protectionist measures are not the solution to the crisis and said there’s a risk that temporary measures taken to protect jobs and business profits now “will create a legacy of uncompetitive industries and sectorial overcapacity.”

Lamy’s warning comes as the global downturn is affecting the flow of goods.

Once the growth engine in the Asia-Pacific region, trade moved from double-digit growth to double-digit declines in economies such as China and India in recent months, and fresh evidence indicates the worst is yet to come, a United Nations economic report predicted.

The collapse of consumer demand in the recession-hit U.S., European Union and Japan has dealt a serious blow to exports of manufactured goods from the region, including textiles and apparel, the report said.

“A significant contraction of Chinese exports to the United States and the European Union, slower economic growth in China and the associated contraction of imports of parts and components from the rest of Asia has been spreading throughout the regional supply chain,” said the “Economic Survey of Asia and the Pacific 2009.”

Economists at the Bangkok-based U.N. Economic & Social Commission for Asia and the Pacific estimate China’s exports declined by 25.7 percent in February compared with the same month the previous year, after declining on a year-over-year basis by 17.5 percent in January and 2.8 percent in December. The 43.1 percent decrease in Chinese shipments in January compared with the previous year “may reflect additional downturns in future export performance.”

Similarly, the report estimates that in January, Hong Kong’s exports declined 21.3 percent, India’s fell 15.9 percent, Japan’s were off 35.3 percent, the Philippines by 41 percent and Thailand by 26.5 percent. The agency forecasts emerging economies in the Asia-Pacific to grow at 3.6 percent compared with negative growth of 2 percent in the world’s major developed countries.

For the biggest emerging economies, China and India, the agency forecasts growth this year of around 7.5 percent and 6 percent, respectively, but expects growth for Pakistan of 2.5 percent, and projects Bangladesh and Sri Lanka to each expand by 5.5 percent.

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