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Law360 (March 12, 2020, 2:21 PM EDT) -- The growth of global services trade has begun to dip, the World Trade Organization reported Wednesday, adding that the intensifying outbreak of the novel coronavirus is likely to exacerbate the downturn in the coming months.
According to the WTO's Services Trade Barometer, the dip began at the end of 2019 and has continued into the first quarter of 2020. The organization said the considerable economic strife caused by the spread of the COVID-19 virus would likely carry the trend forward.
"The current barometer reading and the spread of COVID-19 suggest that services trade may slow further in coming periods," the WTO said.
With its barometer, the WTO uses various metrics to plot services trade growth on a scale ranging from 90 to 110, with 100 serving as the baseline for normal growth. The 96.8 reading issued Wednesday is down from the 98.4 recorded last September.
Passenger air travel and shipping saw the sharpest declines, with information technology and financial services also dipping below historical trends, the WTO said. The data set runs through the end of January and may only partially reflect disruptions caused by the virus, which intensified at the end of that month, the trade body added.
The global purchasing managers' index is the most forward-looking data point included in the WTO's barometer, and its below-average rating of 96.1 reflects "expectations that COVID-19 will continue to weigh on services trade in the near term," the WTO said.
The WTO has often framed the international exchange of services — in areas such as banking, hospitality, transportation and others — as part of the next frontier of trade policy and has been struggling to update its rules in that area.
The World Health Organization has documented more than 125,000 cases of the novel coronavirus worldwide, with 4,600 deaths since it originated in China's Hubei province late last year. In the U.S., the Centers for Disease Control and Prevention has confirmed 938 cases with 29 deaths.
The outbreak has rocked financial markets and caused widespread cancellation of massive public events, roiling the global economy.
Earlier this week, the WTO itself decided to scrap roughly 10 days' worth of scheduled meetings after one of its staffers tested positive for the virus.
--Editing by Abbie Sarfo.
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