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30 November 2000

Growth rate of world merchandise trade expected to double in 2000, according to latest report by WTO Secretariat

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 (Thursday 30 November). The 200-page report contains up-to-date statistics on international trade in 1999, together with an outlook for 2000.

The report recognizes that the impact of trade policy on annual changes in trade flows is usually difficult to discern because the reduction of tariff barriers is implemented over a multi-year period. But the report points out that in 1999 the bulk of the tariff cuts of the Uruguay Round were completed. Consequently, the customs duty collected on imports decreased between 1994 and 1999 by 10 per cent to US$ 39.4 billion for the US, the EU and Japan, which combined account for nearly one half of world imports. As their imports increased over the same period by 40 per cent, the ratio of collected duties to imports decreased by about one third.

For 1999, the report gives detailed figures for merchandise and commercial services trade by region, by country and by product category. Among the highlights of the report are the following:

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Highlights of International Trade

  • 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. For the year as a whole, the volume of trade growth in 1999 was 5 per cent, unchanged from the preceding year.
  • 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. 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 US$ 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 US$ 1350 billion in 1999. Trade of travel services expanded by 2 per cent to US$ 440 billion while exports of transportation and other commercial services increased by one per cent. Western Europe's commercial services exports — which alone account for 47 per cent of the world total — decreased in 1999 partly due to the weakness of the Euro vis-Ó-vis the US dollar.
  • Regional trade performances differed widely in 1999 for both merchandise and commercial service trade. North America and Asia recorded export and import growth well above the global average. The transition economies, Latin America and Africa experienced a contraction of their merchandise import volume and also a decrease in the value of their commercial service imports. While the weak demand in these regions depressed imports, merchandise exports of Latin America and Africa rose in value terms faster than global trade.
  • Developing country merchandise exports rose by 9 per cent, increasing their share in world exports to 27.5 per cent. This higher share was only partly due to the recovery in fuels trade; a larger world share for the developing countries could also be observed for all nine groups of manufactures. The share of developing countries in world exports of manufactures reached nearly 25 per cent, a marked increase since 1990 when it stood at 17 per cent.
  • Least-developed countries merchandise exports in 1999 rose faster than world exports partly due to the strength of shipments of fuels. Exports of manufactured goods to the major developed and developing markets rose by 5 per cent while those of agricultural products decreased by 8 per cent. Over the 1990-99 period, the share of manufactured goods in LDC's exports has increased sharply and accounted in 1999 for one half of their shipments to industrial countries.
  • Although trade growth continued to exceed that of output in 1999, the difference between the two rates was much smaller than that throughout the 1990-99 period. Developments in the first half 2000 indicate that the shrinkage of this margin in 1999 was only temporary and that trade growth is surpassing output growth by more than 5 percentage points in the current year. The volume of merchandise trade growth of 5 per cent exceeded by only 2.5 percentage points that of merchandise output in 1999. Trade in fuels and other minerals fell 4.5 per cent in volume terms which was a much steeper decline than the decrease in output of mining products. Trade continued to expand faster than output for manufactures and agricultural products but in both sectors the difference was smaller than on average in the preceding decade.
  • International capital flows — in particular foreign direct investment — was again a major determinant of international trade. Large capital inflows into the US sustained the large increase of US imports lifting the US share to 18.5 per cent of world merchandise imports – historically an unprecedented level. In the case of Latin America, large capital flows also played a major role in the region's import growth which was twice that of world trade in 1990-98. In 1999, however, the net-capital inflows declined for the second year in a row and contributed to the contraction of imports.
  • In 1999, the bulk of the tariff cuts of the Uruguay Round have 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 US, 2.3 per cent for Japan and to 1.7 per cent for the EU.
  • Regional integration agreements can lead to faster trade growth, in particular intra-regional trade. In the 1990s, however, the intra-trade of the four major RIAs combined did not increase faster than world trade.
  • Trade of regional integration agreements evolved quite differently in 1999. While intra-NAFTA trade expanded by 11 per cent in line with the increase overall, its exports to all other regions declined. The recession in MERCOSUR countries led to a contraction of intra-regional trade by one quarter, while intra-EU trade lagged behind extra-regional imports. Among the four major regional integration agreements, only the Asean grouping recorded an expansion of intra-trade, which was somewhat in excess of extra-regional exports.
  • 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. While the recovery of fuels trade has to be attributed entirely to the rise in prices, the shrinking trade in iron and steel products is due to a combination of price declines and lower import demand.
  • World exports of office and telecom equipment rose by 10 per cent to nearly US$ 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 most dynamic exporters of automotive products in 1999 are not the large traditional producers, but rather more recent suppliers like Mexico, the Republic of Korea, the Czech Republic, Hungary and Poland which expanded their exports by double digit rates not only in 1999, but also throughout the 1990-99 period.
  • 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.
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>Notes to Editors:

The WTO annual report International Trade Statistics 2000 provides comprehensive, comparable and up-to-date statistics on trade in merchandise and commercial services for an assessment of world trade flows by country, region and main product groups or service categories. Some 240 tables and charts are depicting trade developments from various perspectives and providing a number of long-term time series as additional information. Major trade developments are summarised and discussed in the first part of the report under Overview. This volume has been produced by a team of statisticians from the Statistics Division in collaboration with the Economic Research and Analysis Division.

Considerable efforts were made to secure data reliability, consistency and comparability through continued checking and adjustment of primary data. Estimations had also to be made for missing country/periods in order to arrive at meaningful aggregates. Where it was not feasible to adjust for breaks in time-series these are indicated and explained in the technical notes, which also provide information on definitions and methods. Acknowledgements are due to a number of international organisations and national institutions for providing advance statistics.

International Trade Statistics 2000 is published in English, French and Spanish and is available in printed form, on CD-ROM or through the WTO web site (http://www.wto.org). Purchase information for hard copy or CD-ROM versions is available from the WTO online bookshop. Comments and/or enquiries regarding trade statistics may be forwarded to the Statistics Division through e-mail at statistics@wto.org. Further information on merchandise trade statistics may be obtained from Mr. Wladimir Tislenkoff, Chief Merchandise Trade Section (Tel: +41 22 7395131, Fax: +41 22 7395763); information on trade in commercial services may be obtained from Mr. Guy Karsenty, Chief Trade in Services Section (Tel: +41 22 7395426, Fax: +41 22 7395763).

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