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“World merchandise trade is expected to expand only marginally on a
year-to-year basis despite a projected increase of 6% between the
fourth quarter of 2001 and that of 2002,” says the study, which will
be part of the forthcoming 2002 WTO Annual Report.
A
strong rebound is unlikely, according to WTO economists, because of
“sober prospects” for information technology industries.
The
1.5% decline in export volume in 2001 followed a 12% increase in 2000.
The steady decline was blamed on the continued weakness in overall
economic growth (GPD) and in particular the steep fall in inventory
levels in OECD countries, which further depressed import levels.
The
4% decline in export value in 2001 was the largest annual decrease
recorded since 1982. All three major merchandise product groups —
agricultural products, mining products and manufactures — suffered.
Commercial
services exports slipped slightly by 1.5% to US$ 1.4 trillion,
the first year-to-year decline for world exports in commercial
services since 1983. The export value of certain commercial services
— for example, communications, insurance, financial services,
royalties and license fees — rose, but not enough to compensate for
the fall in transportation and travel services exports.
Sharp
contraction of world trade in 2001; moderate recovery projected for
2002.
These
are the report’s main findings:
- In
sharp contrast to 2000, when both trade and output expanded at
record rates, the value and volume of world exports (a measure of
world trade) actually decreased in 2001. In the fourth quarter of
2001, the volume of world exports had fallen to fully 6% below the
preceding year’s level.
- Three
factors played a major role in this stronger than expected global
slowdown: the bursting of the global information technology (IT)
bubble; the sluggishness of demand in Western Europe; and to a
much lesser extent the events of 11 September 2001.
- The
fall in business investment, a sharp rundown of inventories and
weaker private consumption growth in all major industrial markets
led to a matching trade decline throughout 2001.
- The
regions and countries with the strongest export decline
in 2001 were those trading intensively in IT products —
East Asia and the United States. Some of the East Asian traders
that are highly dependent on IT products recorded an unprecedented
export and output decline (e.g. Singapore, Chinese Taipei).
- In
sharp contrast, regions and countries which had benefited from the
sharp recovery of oil and gas prices in 1999–2000 generally
recorded strong import and GDP growth in 2001 (e.g.
transition economies and the Middle East).
- The
US dollar value of world merchandise exports fell by 4% to $6
trillion in 2001, much faster than commercial services exports (–1.5%)
which reached $1.44 trillion last year.
- Developing
countries’ merchandise exports decreased by 6%, a somewhat
steeper decline than the world average in 2001, due to the marked
contraction of shipments of IT products from the East Asian
traders and those of oil exporting developing countries.
- Least-developed
countries’ exports and imports are estimated to have stagnated
in 2001. If these rough estimates are confirmed, the
least-developed countries would have expanded their exports faster
than world trade for the third year in a row but their share
remains very small at 0.5%.
- In
2001 when China joined the WTO, its dynamic trade performance made
it the fourth largest trader in the world (counting the EU as a
single trader and combining exports and imports of merchandise and
commercial services).
- World
trade is expected to recover from the first quarter of 2002
onwards, driven initially by the rebuilding of inventories. The
projected global exports expansion of 6% between the fourth
quarter of 2001 and 2002 leads to an average annual
growth projected at 1%for 2002. For the second year in a row,
growth in world trade will lag behind the expansion of global
output.
- The
IT sector has a larger share in international trade than in global
output. Consequently global trade has suffered more as a result of
the bursting of the IT bubble than has output. Traditionally,
trade has grown faster than output globally. The difference is
likely to be less in the coming years, because of lowered
expectations for demand and investment growth in the IT sector,
combined with higher transaction costs — a fallout from the
events of 11 September 2001.
- A
longer term review of the importance commodity prices in
determining developing countries’ export earnings found:
- Commodity
prices have become much less important in determining the export
earnings of developing countries as a group over the last
decades. The decline in the importance of commodity prices
differed widely between developing regions. From the early 1970s
to the late 1990s, developing Asia and Latin America made
extraordinary progress in becoming less dependent on primary
product exports, but Africa still depends on commodities for 80%
of its merchandise exports.
- Among
developing countries, there continue to be more exporters of
primary products than those exporting mainly manufactured goods.
- A
comparison of the export structure of individual developing
economies between 1968–70 and 1998–2000 reveals that
out of 103 developing economies, only 27 managed to
make the successful transition from predominantly exporting
commodities to predominantly exporting manufactures.
- The
35 developing economy exporters of manufactures
(8 traditional and 27 new) account for more than three
quarters of the total population of developing countries in the
late 1990s. If China and India are excluded, the remaining 33
developing exporters of manufactured goods still represent more
than one half of the population living in the developing world.
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Download
chapter 2 of the Annual Report: World trade developments
(pdf
format 25 pages, 272 KB)
The
complete report will be available in June.
Annual
Reports can be downloaded free from the online
bookshop
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