WTO's chief warns against 'excessive optimism' on recovery

World Trade Organisation (WTO) chief Pascal Lamy Monday warned his agency's member-states that they should avoid "excessive optimism" for an economic recovery.

"Although financial markets are showing signs of stabilising, the crisis is far from over, in particular in many developing countries that are only now starting to feel its full force on their trade and economic growth," Lamy said.

He was addressing a meeting of the Trade Policy Review Body to discuss a recent report on protectionist measures taken by members in the past few months.

"The world economy remains fragile and the economic outlook is still uncertain," he said, noting that there were "a few encouraging signs recently of better-than-expected performance here and there."

The World Bank predicts the global economy will contract by 2.9 percent in 2009 and the WTO forecasts trade volumes to fall by 10 percent.

Lamy said he was "encouraged" by the pledge of the world's leading economies last week in Italy at the Group of Eight (G8) summit to keep markets open and work to conclude the Doha Development Round of trade talks, which have been ongoing since 2001 and are stalled in recent years.

The last report on protectionism showed that the toughest forms of shutting market access had been avoided, though some trade distorting policies had been implemented by a number of member-states.

Also, the report said that serious protectionist moves introduced in the first months of the crisis have largely not been reversed, even if similar new measures have been avoided.

Last updated on Jul 13^th, 2009 at 19:51 pm IST--DPA