World merchandise trade growth rate to double in 2000

Our Corporate Bureau

CHENNAI, NOV. 30. World merchandise trade will grow by about 10 per cent in 2000, twice the rate recorded for 1999 and one of the highest in the last decade, according to the latest report `International Trade Statistics 2000' by the WTO Secretariat published today.

The volume of trade growth in 1999 was 5 per cent, unchanged from the preceding year. Against the background of the Asian recovery and the continued strength of demand growth in North America, global economic output gained momentum and trade growth, which was sluggish at the beginning of 1999, accelerated markedly in the second half, says the WTO report.

World trade growth in the first half of the year 2000 remained buoyant stimulated by stronger economic activity in Western Europe and Latin America and continued high demand growth in North America and Asia. It is projected that the growth of world merchandise trade in 2000 will be about 10 per cent, twice the rate recorded for 1999 and one of the highest in the last decade, notes the report. The trade expansion in 2001 is expected to be somewhat less than in the current year but still higher than the average of 6.5 per cent recorded for the 1990-99 period.

In 1999, the dollar value of world merchandise exports recovered by 3.5 per cent to $5.47 trillion. Prices of internationally traded goods decreased by 1.5 per cent in 1999 as the recovery in fuel prices was more than offset by a further decline in the prices for agricultural and manufactured products.

World exports of commercial services rose by 1.5 per cent to $1,350 billion in 1999. Trade of travel services expanded by 2 per cent to $440 billion while exports of transportation and other commercial services increased by one per cent.

The report observes that in 1999, the bulk of the tariff cuts of the Uruguay Round had been completed resulting in a fall of collected duties in the major developed markets. As imports rose at the same time, the ratio of collected duties to imports fell to a new record low of 2.5 per cent for the U.S., 2.3 per cent for Japan and to 1.7 per cent for the EU.

In 1999, the value growth of the twelve major product categories in merchandise trade ranged from an increase of nearly 20 per cent for fuels to a decrease of more than 10 per cent for iron and steel products.

World exports of office and telecom equipment rose by 10 per cent to nearly $770 billion. A sharp rise in the sales of semi- conductors and mobile phones contributed to this dynamic growth. This product category comprises the hardware components of today's revolution in information technology.

Exports of automotive products rose by 5 per cent in 1999 and also therefore at above average rates.

The decline in world textile exports and the near stagnation in clothing trade in 1999 are largely due to weak Western European trade, in particular intra-regional trade. In a marked contrast, intra-Asian trade in clothing recovered by 8 per cent and that of Latin America to North America rose by 15 per cent.

One of the outstanding features of global trade in clothing is that the growth of developing Asian exports to North America and Western Europe is surpassed by the rise in shipments from Latin America to the North American market and that of transition economies to the Western European markets.

Outlook for 2000

Data available for the first six months of 2000 indicate that the value of world merchandise trade grew by 14 per cent or four times faster than in 1999. Oil exporting countries achieved above average growth due to the continued rise of oil prices which started to exceed $30 per barrel on the spot markets in the second quarter. Asia's imports and exports rose by about one quarter. China's trade expanded by more than one third. In the first six months of 2000, imports of the five Asian developing countries most affected by the 1997-1998 financial crisis again exceeded their pre-crisis level.

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