TRADE: Latest WTO Figures Suggest Recovery

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Oct 10 2002 (IPS) - Trade worldwide will see a one-percent recovery this year, following 1.5-percent contraction in 2001, but still a far behind the growth levels of the 1990s and the 11 percent achieved just two years ago, announced the World Trade Organisation (WTO) here Thursday.

A return to true trade expansion will depend on maintaining the trend of economic recovery in the industrialised countries and Asia’s developing nations through the last half of 2002. Only in that context would the volume of merchandise trade increase one percent by year-end, says the global trade body.

The WTO, which released the 2001 trade statistics Thursday and gave a preview of perspectives for 2002, hopes the price-rise in dollars in the year’s second half extends to all principal groups of products. WTO director-general Supachai Panitchpakdi, who assumed the post last month, said the trade figures for 2001 and the first half of 2002 are "disappointing", and urged policy decisions aimed at increasing confidence and security, which he described as essential for fomenting growth.

Supachai called on the leaders of the WTO’s 144 member states "to send a strong signal to consumers, producers and markets that they intend to move forward in the area of further trade liberalisation" through the current round of international negotiations, begun in November 2001 in Doha, Qatar, at the organisation’s fourth ministerial conference.

By January 2005, the so-called Doha Round should produce its first results with respect to deepening trade liberalisation in strategic sectors like agriculture, services and intellectual property, among others.

To achieve a recovery in international trade, it is essential that "deadlines be met and that these talks stay on course," stressed Supachai.

The trade liberalisation process had been sustained in large part by the exceptional expansion of international commerce in the 1990s.

But the 1.5-percent decline in merchandise trade in 2001 marked the worst performance since 1982, said Patrick Low, director of the WTO’s division of economic development and research.

That contraction affected nearly every economic sector. Manufacturing exports fell 2.5 percent. Trade in farming and mining commodities maintained positive signs, but just 1.5 percent, far below the previous year’s growth.

Among the causes for the shrinking trade flows, Low mentioned the decline in economic activity in the major markets of the industrialised world.

He also cited "the bursting of the investment bubble" in information technologies and telecommunications, along with the "sharp corrections" in the principal stock market indices.

The consequences of the terrorist attacks of Sep 11, 2001, in the United States also contributed to the deceleration of global trade, Low said.

At the international level, North America suffered the greatest decline in the volume of exports (five percent) and imports (3.5 percent) of goods last year.

If all export and import movement is taken into account, North America saw a six-percent decline in trade in both directions. Imports of iron and steel, and of office and telecomms equipment dropped approximately 20 percent for the region.

Asian exports, meanwhile, suffered a decline second only to that of North America, while the region’s imports fell less than two percent.

The transition economies experienced an atypical performance in the 2001 period, which the WTO described as "outstanding", given the adverse global environment for trade.

The favourable outcomes amongst the countries of the former socialist bloc is linked to the strengthening of trade and investment relations between the European Union and Central and Eastern Europe, says the WTO.

In Latin America, one of the most dynamic regions in trade in the 1990s, the value of exports and imports in 2001 were reduced by around four percent.

The 10-percent decline in petroleum prices in 2001 depressed exports from Africa as fossil fuels represented more than half of the region’s foreign sales in 2000. Imports increased nevertheless.

In regards to 2002, the WTO says world economic activity grew stronger over the year’s first half and global trade began to recover after the first quarter.

"Despite this turnaround at the beginning of the year, the dollar value of world merchandise exports remained at four percent below the preceding year’s level" for the January through June period, says the WTO.

In dollar terms, imports of the EU and the United States decreased by six percent in the first six months of 2002. Japan’s and Latin America’s imports, meanwhile, decreased at double-digit rates.

In contrast, the developing nations of Asia saw trade recovery in the first half of 2002 to the tune of more than five percent.

China’s record was particularly noteworthy, with foreign sales as well as imports increasing by more than 10 percent.

As long as the momentum of the industrialised countries and the Asian developing nations continues, world merchandise trade is expected to reach the one-percent growth mark that the WTO had predicted in April, said Low.

TRADE: Latest WTO Figures Suggest Recovery

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, Oct 10 2002 (IPS) - Trade worldwide will see a one-percent recovery this year, following 1.5-percent contraction in 2001, but still a far behind the growth levels of the 1990s and the 11 percent achieved just two years ago, announced the World Trade Organisation (WTO) here Thursday.
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