World trade in goods and services went into reverse last year after two decades of growth, and it looks unlikely to stage only a slight recovery this year, the WTO said yesterday.
Of the major trading powers, only China increased goods exports last year -- by 7 percent. The value of US exports, on the other hand, was down 7 percent on the previous year, according to a report by WTO economists.
PHOTO: REUTERS
The report, part of the Geneva-based body's annual survey of the world trading scene, said the volume of goods exports last year -- a gloomy year for the powerful US economy -- was 1 percent down on the all-time record of the previous year. Export value dropped 4 percent to US$6 trillion from US$6.2 trillion in 2000.
The figures were much worse than predictions by the WTO in late October last year when it said despite a global economic downturn trade would still be up some 2 percent on the previous year -- when growth was 12 percent.
Services trade -- although buoyant in telecommunications, banking and insurance -- also dipped by one percent, driven down by a plunge in export of transport and travel services after the Sept. 11 attacks in the US.
Although that incident played a role in the overall decline, the WTO economists said, the major factors were the collapse in the information technology business and sluggish consumer demand in Western Europe and other major markets.
Compounding the situation, the WTO said, was a decline in business investment and a sharp rundown of inventories.
East Asian countries such as Singapore, South Korea, Taiwan, Japan and Malaysia, and the US -- all heavy traders in IT and related products -- saw the sharpest export falls, according to the report.
Taiwan saw a huge drop of 17 percent, and Japan, Singapore and The Philippines were down by 16 percent. Malaysia recorded a decline of 10 percent.
The 15-nation EU, the world's largest single exporting entity with 18.4 percent of global sales, did much better, recording no growth but no decline. The remaining trader in the top five, Canada, was down by 5 percent.
The WTO economists said this year was expected to see a recovery from the end of March, initially driven by a rebuilding of inventories. Growth could reach 6 percent in the last three months against the same period last year.
But given moderate output increases in major markets and gloomy prospects for an IT recovery, trade growth was unlikely to total more than one percent for the whole 12 months.
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