European Union Trade Commissioner Karel De Gucht said Tuesday that European import demand was holding up well despite the debt crisis, but trade could fall suddenly if a recession takes hold.
When you get into a crisis you can have a very sudden fall of trade, De Gucht told reporters in a joint press conference with U.S. officials at the conclusion of the annual U.S.-EU Transatlantic Economic Council.
This is not yet the case. I think it's very important to stress that, De Gucht added.
Europe's debt crisis has raised fears of spillover effects that could cripple growth in the rest of the world.
President Barack Obama pressed European Union officials on Monday to act quickly and decisively to resolve the debt crisis, which he said was weighing on the U.S. economy.
De Gucht acknowledged that trade can fall quickly in times of crisis because of multiplier effect that spreads quickly through the economy.
The reason for that is the supply chains that span in fact the whole world, he said.
But even Italy, an eurozone country under considerable strain, is still seeing a strong growth in trade, he said.
Hackett Associates, which follows trade at the top U.S. and EU ports for the National Retail Federation, has said it expects seaborne container shipments to northern Europe to fall in the fourth quarter by the most since early 2009.
2011 looks suspiciously like 2008 when world trade collapsed with the global recession of 2009, said the firm's founder Ben Hackett in its monthly report.
There is not yet enough evidence to suggest that this will be repeated but the danger of this happening is increasing.
De Gucht, who was in Washington for talks on ways to expand transatlantic trade, said he still believed Europe had time to act to resolve the debt crisis and avoid a recession.
I think it's very important what will happen in the coming weeks. If we find a solution in the coming weeks for the financial crisis then I think the situation in Europe will stabilize and markets calm down, he said.
On the other hand, if it still takes considerable time then there is a risk of recession. And if there really is a recession, then you will see a sudden downfall of trade. But it's not yet the case. It's rather the contrary, you see trade going up considerably still, he said.
The latest U.S. trade figures indicate transatlantic trade has remained strong.
U.S. exports to the 27-nation EU were up 14.8 percent to $200.4 billion in the first nine months of 2011.
EU exports to the United States were up 16.6 percent at $272.3 billion in the same period.
(Reporting by Doug Palmer; Editing by Andrea Ricci and Cynthia Osterman)