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World trade can still expand by on percent: WTO
GENEVA (October 14 2002) : World trade could still expand by one percent this year as long as major economies continue to recover, the World Trade Organisation (WTO) said on Thursday.
In its autumn survey, the world trade body said a combination of higher prices for oil and non-fuel commodities and stronger volume growth had lifted the value of world trade in the second quarter of 2002 above that of a year ago.
"Provided the momentum of the recovery in certain OECD countries and developing East Asia is maintained, global merchandise trade could achieve the one percent annual growth in volume terms," it said.
The WTO initially forecast one percent growth in April when it released preliminary figures showing that world trade declined in 2001 for the first time in two decades.
The United States was once again "the principal driving force" in the expansion of global trade in 2002 and figures up to the end of July were stronger than initially expected.
This offset a weaker than anticipated performance in Europe, leaving the overall forecast unchanged, WTO economists said.
"Global economic activity strengthened in the first half of 2002 and world trade started to recover from the first quarter onwards," the WTO said in its report.
The final 2001 figures showed a 1.5 percent fall last year, more than the one percent expected in April, with the economic slowdown in major industrialised countries being accentuated by fallout from the September 11 attacks in the United States.
The fall followed record world trade growth of 11 percent in 2000.
WTO Secretary-General Supachai Panitchpakdi said the disappointing trade performance this year and last underlined the urgency of progress in the so-called Doha round of negotiations on further freeing world trade.
With export and import levels hit by the sluggish world economy, political leaders needed to act to boost confidence.
"One such measure would be for political leaders to send a strong signal to consumers, producers and markets that they intend to move forward in the areas of further trade liberalisation through the Doha Development Agenda," he said.
The WTO said that trade in Asian developing countries recovered strongly in the first half of 2002, rising five percent year-on-year.
Chinese trade was particularly buoyant, showing 10 percent growth, it added.
In value terms, world trade was expected to rise two percent this year, compared with 2001, because of increases in oil and other commodity prices.
This was despite a four percent drop over the first six months.
"Even if oil prices remain unchanged (at current levels), there will have been a sharp year-on-year increase," WTO economist Michael Finger told a news conference.
Exports of manufactured goods slumped 2.5 percent in 2001, outweighing a 1.5 percent rise in agricultural and mining products, the WTO said.
But the former Soviet bloc, the transitional economies, recorded strong trade growth last year despite the world slowdown, reflecting their deepening economic ties with the European Union, it noted.
Exports of manufactured goods from central and eastern Europe to the EU rose 12 percent in 2001.
Courtesy Business Recorder
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Pakissan.com;
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