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WTO Expects Global Trade to Increase in 2002 - 2002-05-02

The World Trade Organization, WTO, says it expects global trade to increase slightly this year after a sharp drop in 2001. But, the WTO's annual World Trade Report predicts only a modest recovery of about one percent.

WTO economists say global trade last year experienced its worst performance in almost two decades.

The report says the value of goods traded among countries fell by four percent - a sharp turnaround from the record 12 percent increase in 2000. And, for the first time since 1983, the report says trade in services also declined.

Senior WTO Economist Michael Finger says three factors, played a major role in the sharp drop in world trade last year.

"First, there was this bursting of the global information technology bubble," he said. "This was a major impact. Then the sluggishness of demand in Western Europe, which was not foreseen to this extent. And, to a much lesser extent, events of September 11 also played a role."

Mr. Finger says the United States and countries in East Asia which trade intensively in information technology suffered the biggest decline in exports in 2001. By contrast, Middle East countries and other nations that rely on exports of oil and natural gas recorded strong gains.

The WTO report says China also showed a gain, to become the fourth largest exporter of merchandise and commercial services. Several countries in central Europe also showed large increases in exports.

The report says many developing countries have become much less dependent on commodity prices for their export earnings. It says that in the 1950s, commodities accounted for 90 percent of exports by developing countries. This since has shrunk to 30 percent.

However, Mr. Finger says the dependence on commodities varies widely among the developing regions.

"Above all, for most of the African countries, commodity prices still matter," he said. "They depend a lot on the commodity prices. We have seen in line with the recovery that the commodity prices also start to pick up."

WTO economists say they expect to see a slight recovery in world trade this year. They foresee global exports expanding by six percent in the final three months of the year. But, they say the sluggish performance in the first part of the year means the total annual increase will be only one percent.