The Hindu : Business : Strong growth seen in world trade

Online edition of India's National Newspaper
Tuesday, Apr 06, 2004

Business

Business

Strong growth seen in world trade

GENEVA, APRIL 5. World trade recovered, propelled by higher than expected economic growth in Asia and the U.S., at an increased rate in 2003, and could expand further in 2004 should the global economy continue to improve, according to the World Trade Organisation's latest figures, released on Monday.

A 2.5 per cent increase in global output in 2003 spurred world trade to recover by 4.5 per cent.

"The improved economic situation in the U.S and Asia has given an important boost to world trade," said WTO Director-General, Supachai Panitchpakdi.

In 2003, Asia and the transition economies were the regions recording the most dynamic trade performance. Their merchandise exports and imports expanded in real terms (adjusted for price changes) between 10 per cent and 12 per cent, more than twice as fast as world merchandise trade.

China's imports expanded by a remarkable 40 per cent in nominal dollar terms (not adjusted for price changes) while its exports expanded by 35 per cent, unprecedented levels of expansion for a country with such substantial trade volume.

For the third successive year, U.S. import growth exceeded the world average. This buoyancy has been a significant factor in mitigating sluggish world trade growth over the last few years.

However, the U.S. import growth continues to exceed export growth, further widening the trade deficit.

World merchandise exports rose by 16 per cent to $7.3 trillion and commercial services exports by 12 per cent to $1.8 trillion in 2003. For both merchandise and services trade, this was the strongest annual increase in nominal terms since 1995.

Developing countries' merchandise exports expanded by 17 per cent in 2003, slightly faster than their imports and the world average.

The overall trade surplus widened for these countries. But according to estimates based on incomplete data, developing countries' commercial services exports and imports expanded at only half the rate of world services trade in 2003.

Major trade developments in 2003, at country level, include the extraordinary expansion of China's merchandise trade. China leapfrogged three positions and currently ranks, for the first time, number three among the world's leading merchandise importers.

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