High rates of World Trade growth continue to outstrip output growth: WTO secretariat sees link to globalization

In its new report(1)"International Trade - Trends and Statistics", the WTO Secretariat points out that recent trade growth figures continue to exceed world production growth by a large margin - in 1995 probably by a factor of almost three and next year close to double. This persistent pattern relates closely to the "globalization" of the world economy; a process which, says the Secretariat, brings far-reaching benefits and which can be promoted through the further development of the multilateral trading system.

The report's detailed statistical analysis concentrates on 1994. It examines recent trade trends by country, region and major product groups and services sectors. Among the points highlighted are:

- a 13 per cent rise pushed the value of world merchandise trade past the $4,000 billion mark for the first time, to $4090 billion;

- an 8 per cent increase in the value of trade in commercial services, to $1100 billion, after near stagnation in 1993;

- a 23 per cent increase in the dollar value of merchandise trade in the first six months of 1995 which, allowing for the depreciation of the US dollar, is consistent with a full-year growth in trade volume of 8 per cent.

The Report examines the changing relationship between world trade growth and output and seeks to draw some conclusions with respect to the nature of global economic integration, or "globalization".

Over the period from 1950 (when the process of trade liberalization through the early GATT Rounds got under way) to 1994 the volume of world merchandise trade increased at an annual rate of slightly more than 6 per cent and world output by close to 4 per cent. Thus, during those 45 years world merchandise trade multiplied 14 times and output 5 1/2 times. However, the excess of trade growth over output growth varied; from an average of a mere half percentage point in the period 1974-84 to nearly 3 1/2 percentage points in the most recent 10 years. In fact, the excess during the years since 1990 has been much higher still but it is not yet clear whether or not this represents a permanent shift to a faster rate of increase in the world's trade-to-output ratio.

Having analyzed these trends from regional and product points of view, the Secretariat comments that:

"...the rising ratio - and global integration more generally - are being driven by the interaction of changes in government policies (especially the liberalization of trade and capital flows), by technological innovations that reduce communications and transport costs, and by evolving corporate and individual investor strategies which both drive and are facilitated by the first two developments"

The report considers each of these elements in some detail and then asks two fundamental questions. As to why anyone should care about the pace of globalization, the Secretariat observes that the benefits from innovation, new product development and specialization in production are wide-ranging. In particular, those developing and transition economies which have participated in globalization by opening up their own markets have enjoyed faster economic growth. For the OECD countries, there is evidence that the deepening of trade linkages has helped moderate cyclical economic downturns.

To the question "Will globalization continue?", the report observes that two factors - technological change and the evolving strategies of firms and individual investors - impart a natural momentum to global integration. It is government policies which can speed-up, slow down or even reverse progress on global integration. In this context, the role of non-discrimination - in particular, through the "most-favoured-nation" (MFN) clause - is examined.

MFN was the centrepiece of a multiplicity of bilateral trade agreements reached in Europe in the second half of the Nineteenth Century, a period marked by very low tariffs and rapidly increasing trade. In contrast, the 1920s and 1930s saw efforts to restore liberal trade through international trade conferences rather than legally-binding commercial treaties based on MFN. The failure of these efforts contributed to the Great Depression and provided some of the roots of military confrontation in 1939. It was only after the War that negotiations established what became the GATT, a multilateral contract consisting of rules and disciplines and based firmly (Article I) on MFN treatment.

The GATT system has been a post-war bulwark against a return to the trade chaos of the 1930s. The Secretariat considers that, in the 1990s, a dis-integration of the globalized international economy on the scale of the 1930s is almost unthinkable. In contrast, today "the threat that would be posed by a loss of credibility of the multilateral rules" (now represented by the WTO) would be " a fracturing of the global economy into inward-looking and potentially antagonistic trading blocs".

The report suggests two safeguards against such an eventuality:

- the examination of new ways to ensure that free-trade areas and customs unions remain outward-looking and complement rather than compete with the multilateral trading system; and

- progress in dealing, at the multilateral level, with new issues tied directly to the further evolution of the global economy. These include telecommunications, financial services, environment, competition and investment policies among others.

The report concludes:

"Progress in dealing with these and other issues at the multilateral level will have a significant impact on the future pace of global integration, both directly and through its impact on the credibility of the multilateral system in influencing the broad spectrum of national trade policies"

Please see as follows the Table of Contents and List of Tables and Charts from:

INTERNATIONAL TRADE - TRENDS AND STATISTICS 1995

TABLE OF CONTENTS

I. World trade in 1994 and prospects for 1995 and 1996

Overview and prospects

World trade in 1994

1. Global developments

2. Merchandise trade by product group

3. Trade recovery by region

4. Leading traders of merchandise and services

The pace of global integration

STATISTICAL SECTION

II. Current and selected long-term trends

III. Merchandise trade by region

1. North America

2. Latin America

3. Western Europe

4. Central and Eastern Europe and the former USSR

5. Africa

6. Middle East

7. Asia

IV. Merchandise trade by product

1. Food

2. Fuels

3. Iron and steel

4. Chemicals

5. Machinery and transport equipment: Office machines and telecom equipment; Automotive products.

6. Textiles

7. Clothing

Appendix: Technical notes

Appendix tables

LIST OF TABLES AND CHARTS

I. World trade in 1994 and prospects for 1995 and 1996

Chart I.1 Growth in the volume of world merchandise exports and production, 1984-94

Table I.1 Growth in the volume of world merchandise exports and production by major product group, 1990-94

Table I.2 Growth in the value of world exports by major product group, 1990-94

Chart I.2 Growth in the value of world merchandise exports by product, 1994

Chart I.3 Product shares in world merchandise exports, 1994

Table I.3 Recent changes in export prices of primary commodities, 1994-95

Chart I.4 Regional shares in world merchandise trade, 1994

Table I.4 Growth in the value of world merchandise trade by region, 1990-94

Table I.5 Growth in the volume of world merchandise trade by region, 1990-94

Chart I.5 Share of intra-regional trade in selected regions' total merchandise trade, 1990 and 1994

Table I.6 Growth in the value of trade in commercial services by region, 1993-94

Table I.7 Leading exporters and importers of world merchandise trade, 1994

Table I.8 Leading exporters and importers of world trade in commercial services, 1994

Chart I.6 Postwar developments in the volume of world merchandise trade and output by major sector, 1950-94

Chart I.7 Ratio of trade in goods and services to GDP by selected region, 1974-94

Statistical Section

II. Current and selected long-term trends

Table II.1 World merchandise exports, production and gross domestic product, 1980-94

Table II.2 Composition of world merchandise exports by region and product, 1984 and 1994

Table II.3 Leading exporters and importers in world merchandise trade (excluding intra-EU trade), 1994

Table II.4 Trade of the European Union, the United States and Japan with the least developed countries, 1990-94

Table II.5 Trade in commercial services of selected economies by sector, 1992

Chart II.1 Long-term trends of world merchandise trade and output, 1950-94

Table II.6 Merchandise exports of North America by product,1963,1973,1983,1993 and 1994

Table II.7 Merchandise imports of North America by product,1963,1973,1983,1993 and 1994

Table II.8 Merchandise exports of Western Europe by product, 1963,1973,1983,1993 and 1994

Table II.9 Merchandise imports of Western Europe by product,1963,1973,1983,1993 and 1994

Table II.10 Merchandise exports of Japan by product,1963,1973,1983,1993 and 1994

Table II.11 Merchandise imports of Japan by product,1963,1973,1983,1993 and 1994

Table II.12 Imports of manufactures into North America, Western Europe and Japan

from selected regions,1963,1973,1983,1993 and 1994

Table II.13 Leading exporters of manufactures,1963,1973,1983,1993 and 1994

Table II.14 Leading importers of manufactures,1963,1973,1983,1993 and 1994

III. Merchandise trade by region

Chart III.1 World merchandise trade by region,1990-94

Table III.1 World merchandise exports by region,1980-94

Table III.2 World merchandise imports by region,1980-94

Table III.3 Regional structure of world merchandise exports,1994

1. North America

Table III.4 Merchandise trade of North America,1994

Table III.5 Merchandise trade of North America by major product group,1994

Chart III.2 Merchandise trade of North America,1984-94

Chart III.3 Share of North America in world merchandise trade,1984-94

Table III.6 Merchandise exports of North America by product,1990-94

Table III.7 Merchandise imports of North America by product, 1990-94

Table III.8 Merchandise exports of North America by destination,1990-94

Table III.9 Merchandise imports of North America by origin,1990-94

Table III.10 Gross domestic product and trade in goods and services in Canada and the United States,

1980-94

Table III.11 Merchandise exports and imports of Canada and the United States, 1980-94

Table III.12 Merchandise exports of North America to Mexico by product, 1980-94

Table III.13 Merchandise imports of North America from Mexico by product, 1980-94

Table III.14 Merchandise exports of the United States to China by selected product, 1980-94

Table III.15 Merchandise imports of the United States from China by selected product, 1980-94

Table III.16 Merchandise exports of NAFTA countries by region, 1988-94

2. Latin America

Table III.17 Merchandise trade of Latin America,1994

Table III.18 Merchandise trade of Latin America by major product group,1994

Chart III.4 Merchandise trade of Latin America, 1984-94

Chart III.5 Share of Latin America in world merchandise trade,1984-94

Table III.19 Merchandise exports of Latin America by product,1990-94

Table III.20 Merchandise exports of Latin America by destination, 1990-94

Table III.21 Leading merchandise exporters and importers in Latin America, 1994

Table III.22 Merchandise exports of MERCOSUR countries by region, 1990-94

Table III.23 Merchandise imports of MERCOSUR countries by region, 1990-94

3. Western Europe

Table III.24 Merchandise trade of Western Europe, 1994

Table III.25 Merchandise trade of Western Europe by major product group, 1994

Chart III.6 Merchandise trade of Western Europe, 1984-94

Chart III.7 Share of Western Europe in world merchandise trade, 1984-94

Table III.26 Merchandise exports of Western Europe by product, 1990-94

Table III.27 Merchandise imports of Western Europe by product, 1990-94

Table III.28 Merchandise exports of Western Europe by destination, 1990-94

Table III.29 Merchandise imports of Western Europe by origin, 1990-94

Table III.30 Gross domestic product and trade in goods and services in Western Europe, 1990-94

Table III.31 Merchandise exports and imports of the European Union and EFTA, 1980-94

Table III.32 Leading merchandise exporters and importers in Western Europe, 1994

4. Central and Eastern Europe and the former USSR

Table III.33 Merchandise trade of Central and Eastern Europe and the former USSR, 1994

Table III.34 Merchandise trade of Central and Eastern Europe and the former USSR by major product group, 1994

Chart III.8 Merchandise trade of Central and Eastern Europe and the former USSR, 1984-94

Chart III.9 Share of Central and Eastern Europe and the former USSR in world merchandise trade,1984-94

Table III.35 Merchandise exports of Central and Eastern Europe and the former USSR by major product group and destination,1994

Table III.36 Merchandise exporters and importers in Central and Eastern Europe and the former USSR,1994

Table III.37 Merchandise imports of the European Union from Central and Eastern Europe by country and product, 1991-94

Table III.38 Merchandise exports and imports of major traders with the successor States of the former USSR, 1992-94

5. Africa

Table III.39 Merchandise trade of Africa, 1994

Table III.40 Merchandise trade of Africa by major product group, 1994

Chart III.10 Merchandise trade of Africa, 1984-94

Chart III.11 Share of Africa in world merchandise trade, 1984-94

Table III.41 Merchandise trade of regional groupings in Africa, 1980-94

Table III.42 Leading merchandise exporters and importers in Africa, 1994

Table III.43 Merchandise imports of the European Union from Africa by product, 1990-94

Table III.44 Merchandise exports of the European Union to Africa by product, 1990-94

Table III.45 Merchandise trade of South Africa by region and product, 1993

6. Middle East

Table III.46 Merchandise trade of the Middle East, 1994

Table III.47 Merchandise trade of the Middle East by major product group, 1994

Chart III.12 Merchandise trade of the Middle East, 1984-94

Chart III.13 Share of the Middle East in world merchandise trade, 1984-94

Table III.48 Merchandise exports of the Middle East by major product group and destination, 1994

Table III.49 Merchandise exports of the Middle East by destination, 1990-94

Table III.50 Imports of fuels of selected regions and economies from the Middle East, 1980-94

Table III.51 Leading merchandise exporters and importers in the Middle East, 1994

Table III.52 Merchandise imports of Saudi Arabia by origin, 1990-93

Table III.53 Merchandise imports of Saudi Arabia by product, 1990-93

Table III.54 Merchandise exports of Israel by destination, 1990-94

Table III.55 Merchandise imports of Israel by origin, 1990-94

7. Asia

Table III.56 Merchandise trade of Asia, 1994

Table III.57 Merchandise trade of Asia by major product group, 1994

Chart III.14 Merchandise trade of Asia, 1984-94

Chart III.15 Share of Asia in world merchandise trade, 1984-94

Table III.58 Merchandise exports of Asia by product, 1990-94

Table III.59 Merchandise exports of Asia by major product group and destination, 1994

Table III.60 Merchandise exports of Asia by destination, 1994

Table III.61 Merchandise trade of Japan in volume terms by region, 1990-95

Table III.62 Merchandise exports of regional groupings in Asia, 1980-94

Table III.63 Merchandise imports of regional groupings in Asia, 1980-94

Table III.64 Leading merchandise exporters and importers in Asia, 1994

Table III.65 Merchandise exports of Japan to China by selected product group, 1990-94

Table III.66 Merchandise imports of Japan from China by selected product group, 1990-94

IV. Merchandise trade by product

Chart IV.1 World merchandise exports by product, 1990 and 1994

Table IV.1 World merchandise exports by product, 1980-94

Table IV.2 Regional structure of world exports of agricultural products, 1994

Table IV.3 Regional structure of world exports of mining products, 1994

Table IV.4 Regional structure of world exports of manufactures, 1994

Table IV.5 Exports of manufactures of selected economies, 1980 and 1989-94

Table IV.6 Imports of manufactures of selected economies, 1980 and 1989-94

1. Food

Table IV.7 World trade in food, 1994

Table IV.8 World trade in food by region, 1994

Table IV.9 European Union and United States food exports by selected region, 1980-94

Chart IV.2 Regional shares in world trade in food, 1994

Table IV.10 Imports of food into North America,Western Europe and Asia by region, 1980-94

Table IV.11 Leading exporters and importers of food, 1994

2. Fuels

Table IV.12 World trade in fuels, 1994

Table IV.13 World trade in fuels by region, 1994

Table IV.14 Major regional flows in world exports of fuels, 1994

Chart IV.3 Regional shares in world trade in fuels, 1994

Table IV.15 Imports of fuels into North America,Western Europe and Asia by region, 1980-94

Table IV.16 Imports of fuels of selected economies, 1980 and 1989-94

3. Iron and steel

Table IV.17 World trade in iron and steel, 1994

Table IV.18 World trade in iron and steel by region, 1994

Table IV.19 Major regional flows in world exports of iron and steel, 1994

Chart IV.4 Regional shares in world trade in iron and steel, 1994

Table IV.20 Imports of iron and steel into North America, Western Europe and Japan from selected regions, 1980-94

Table IV.21 Exports of iron and steel of selected economies, 1980 and 1989-94

4. Chemicals

Table IV.22 World trade in chemicals, 1994

Table IV.23 Major regional flows in world exports of chemicals, 1994

Table IV.24 Share of chemicals in total merchandise trade and in manufactures by region, 1994

Chart IV.5 Regional shares in world trade in chemicals, 1994

Table IV.25 Exports of chemicals from North America, Western Europe and Japan by destination,1980-94

Table IV.26 Leading exporters and importers of chemicals, 1994

5. Machinery and transport equipment

Table IV.27 World trade in machinery and transport equipment, 1994

Table IV.28 Major regional flows in world exports of machinery and transport equipment,1994

Table IV.29 Share of machinery and transport equipment in total merchandise trade and in manufactures by region, 1994

Chart IV.6 Regional shares in world trade in machinery and transport equipment, 1994

Table IV.30 Exports of machinery and transport equipment from North America, Western Europe and Asia by destination, 1980-94

Table IV.31 Leading exporters and importers of machinery and transport equipment, 1994

Office machines and telecom equipment

Table IV.32 World trade in office machines and telecom equipment, 1994

Table IV.33 Major regional flows in world exports of office machines and telecom equipment, 1994

Table IV.34 Share of office machines and telecom equipment in total merchandise trade and in manufactures by region, 1994

Chart IV.7 Regional shares in world trade in office machines and telecom equipment, 1994

Table IV.35 Exports of office machines and telecom equipment from North America, Western Europe and Asia by destination, 1980-94

Table IV.36 Leading exporters and importers of office machines and telecom equipment, 1994

Table IV.37 Exports of office machines and telecom equipment of selected economies, 1980 and 1989-94

Table IV.38 Imports of office machines and telecom equipment of selected economies, 1980 and 1989-94

Automotive products

Table IV.39 World trade in automotive products, 1994

Table IV.40 Major regional flows in world exports of automotive products, 1994

Table IV.41 Share of automotive products in total merchandise trade and in manufactures by region,1994

Chart IV.8 Regional shares in world trade in automotive products, 1994

Table IV.42 Exports of automotive products from North America, Western Europe and Japan by destination, 1980-94

Table IV.43 Leading exporters and importers of automotive products, 1994

Table IV.44 Exports of automotive products of selected economies, 1980 and 1989-94

Table IV.45 Imports of automotive products of selected economies, 1980 and 1989-94

6. Textiles

Table IV.46 World trade in textiles, 1994

Table IV.47 Major regional flows in world exports of textiles, 1994

Table IV.48 Share of textiles in total merchandise trade and in manufactures by region, 1994

Chart IV.9 Regional shares in world trade in textiles, 1994

Table IV.49 Textile imports of the United States during the Multi-Fibre Arrangement by region and major supplier, 1974, 1981 and 1994

Table IV.50 Textile imports of the European Union during the Multi-Fibre Arrangement by region and major supplier, 1974, 1981 and 1993

Table IV.51 Leading exporters and importers of textiles, 1994

Table IV.52 Exports of textiles of selected economies, 1980 and 1989-94

Table IV.53 Imports of textiles of selected economies, 1980 and 1989-94

7. Clothing

Table IV.54 World trade in clothing, 1994

Table IV.55 Major regional flows in world exports of clothing, 1994

Table IV.56 Share of clothing in total merchandise trade and in manufactures by region, 1994

Chart IV.10 Regional shares in world trade in clothing, 1994

Table IV.57 Clothing imports of the United States during the Multi-Fibre Arrangement by region and major supplier, 1974, 1981 and 1994

Table IV.58 Clothing imports of the European Union during the Multi-Fibre Arrangement by region and major supplier, 1974, 1981 and 1993

Table IV.59 Leading exporters and importers of clothing, 1994

Table IV.60 Exports of clothing of selected economies, 1980 and 1989-94

Table IV.61 Imports of clothing of selected economies, 1980 and 1989-94

Appendix tables

Table A1 World merchandise exports, production and gross domestic product, 1984-94

Table A2 Network of world merchandise trade by region, 1992-94

Table A3 World merchandise exports by region and selected economy, 1984-94

Table A4 World merchandise imports by region and selected economy, 1984-94

Table A5 World exports of commercial services by selected region and economy, 1984-94

Table A6 World imports of commercial services by selected region and economy, 1984-94

Table A7 Network of world merchandise trade by product and region, 1992-94

Table A8 Canada - Merchandise trade by product, region and major trading partner, 1992-94

Table A9 United States - Merchandise trade by product, region and major trading partner, 1992-94

Table A10 European Union (12) - Merchandise trade by product, region and major trading partner, 1992-94

Table A11 France - Merchandise trade by product, region and major trading partner, 1992-94

Table A12 Germany - Merchandise trade by product, region and major trading partner, 1992-94

Table A13 United Kingdom - Merchandise trade by product, region and major trading partner, 1992-94

Table A14 Japan - Merchandise trade by product, region and major trading partner, 1992-94

Table A15 Hong Kong - Merchandise trade by product, region and major trading partner, 1992-94

Table A16 Hong Kong - Domestic exports and re-exports of merchandise by product, region and major trading partner, 1992-94

Table A17 Republic of Korea - Merchandise trade by product, region and major trading partner,1992-94

Table A18 Singapore - Merchandise trade by product, region and major trading partner, 1992-94

Table A19 Export prices of primary commodities, 1984-95

(1)"INTERNATIONAL TRADE - TRENDS AND STATISTICS 1995" is currently available in English and in French (the Spanish version will be available in the near future). The cost is SF 40 (also available on diskette at SF 40 or both the publication and diskette at SF 70). It can be ordered from the WTO Publications Service, World Trade Organization, Centre William Rappard, 154 Rue de Lausanne, CH1211 Geneva 21, tel: (41 22) 739 5208, fax: (41 22) 739 5458, E-mail "[email protected]".