DEVELOPMENT-TRADE: Progress in 1997 Despite Asian Crisis

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Dec 20 1997 (IPS) - At the close of 1997, world trade and production registered accelerated growth in relation to 1996, despite the crisis in some Asian financial markets, concluded the World Trade Organisation (WTO).

In the specific case of trade in goods, the WTO forecast registered global expansion of seven percent in real terms this year compared with the five percent of 1996.

The effects of the financial crisis in the second half of this year in the markets of southeast Asia will appear in the data for 1998, predicted the Geneva-based organisation.

The world tendency is towards a reduction in differences between regions, with a stronger economic activity in Eastern Europe and the transition economies.

The dynamic economies of Eastern Asia are expected to slow, but most will present growth rates of above the world average anyway.

Forecasts for 1997 contained in the WTO annual report described a strong growth rate in North America, despite a slight slowing at the end of the year.

Latin America is expected to maintain its recovery, which is reflected in a growth rate higher than that of the 1990-1995 period.

Meanwhile, in Africa, the growth rate will be faster than in many of the years leading up to 1996, although the region will not achieve such satisfactory results as last year.

The WTO, created by the nations in 1995 to supervise the liberalisation of the world economy, ggested the difficulties in the Asian financial markets would just be a “temporary setback” if these countries administer the situation well.

The Organisation said it understood the recent events in the finances of several countries in southeast Asia will continue presenting challenges to the policies of interested governments over the next few months.

Several of the economies in crisis had already shown signs of deceleration when the problems in the financial sector arose. But the WTO proclaimed there was “great confidence” in the mid-term perspectives of these countries as they have retained the qualities which contributed to their growth in the last few years.

Despite the crisis, the Asian countries affected have conserved the high savings and investment ratio, high educational and training levels and an open foreign policy.

The WTO recognised its evaluation of 1997 trade was based on the indicators available when the report was drawn up in August this year, when the full seriousness of the Asian crisis was still not known.

This annual report pointed out the advances seen in the policy of extending the liberalisation of goods and services in the last year.

It highlighted the agreement reached for the liberalisation of the basic telecommunications sector and the commitment made by the states to eliminating customs fees on information technology products.

The international trade in information products is worth 600 billion dollars per year, a fugure similar to the income of the telephone companies.

WTO sponsored negotiations for the liberalisation of the financial services (banks, insurance and stock exchanges) also ended with an agreement last weekend, although the report had already been written when this occured.

In the future, the World Trade Organisation will once again attend to regional associations world wide, as practically all of the members of the organisation belong to at least one regional economic group.

The document took up some of the objections the WTO presented to the regional integration initiatives which “pose certain problems for the trade system as a whole,” it said.

One of the aims of the WTO is to achieve coherence between the various regional groups, above all in the cases where there are superimpositions.

At the same time, the WTO will be rooting for protection for the multilateral trade system through congruent focusses on political matters and eliminating barriers to trade arising between and also within these groups.

In its programme for 1998, the WTO promised to attend to the needs of all its members, including “the countries which run the risk of being marginalised,” referring to the less developed countries.