Propelled by higher than expected economic
growth in Asia and the United States, world trade recovered 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 (WTO) latest figures, released on 5 April, 2004.
A 2.5 per cent increase in global output in 2003 spurred world trade to recover by 4.5 per
cent. While this growth was stronger than expected a year ago after the outbreak of severe
acute respiratory syndrome (SARS) and the build-up of tensions in the Middle East, trade
and output expansion in real terms in 2003 remained below the average rates recorded since
1995.
(See chart I). However, WTO economists say that with global GDP growth expected to
reach 3.7 per cent in 2004, world trade could expand 7.5 per cent in 2004, although there
are a number of risks associated with these projections — including the possibility
of slower than expected import growth in the United States and a faltering in demand
recovery in Western Europe.
"Clearly, the improved economic situation in the United States and Asia has given an
important boost to world trade," said WTO Director-General Supachai Panitchpakdi.
"But when you look around the world, the pace of trade growth remains uneven and
there remain many barriers to trade globally. Greater expansion of trade would provide
support for sustained economic growth and job creation. If this potential is to be
realised, the many trade distortions that exist must be addressed, and the best way to do
that is to bring about a successful conclusion to the Doha Development Agenda."
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 (i.e.
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 (i.e. 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.
But Western Europe and Latin America recorded weak real import growth — the weakest
in fact of all regions — at less than 2 per cent, reflecting the sluggishness of
their economies. (See chart III).
For the third successive year, United States 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, US import growth continues to exceed export growth, further
widening the trade deficit.
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