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23 May 2001
WTO Secretariat releases 2001 Annual report

Global trade and output growth in 2000 were the strongest in more than a decade, with all regions benefiting from the stronger world economy, according to WTO Annual report 2001 published today (23 May).

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Merchandise trade expansion in real terms in 2000 matched the best annual rates observed over the last five decades. However, a deceleration of economic growth began in the final quarter of 2000, clouding the trade prospects for 2001.

The 151-page report includes an overview of the developments in the international trading environment and a summary of WTO activities. The introduction highlights the launching of the negotiations on agriculture and services, the assistance provided to the least developed countries and various issues arising out of the Seattle Ministerial. It also includes an account of the activities of the various WTO bodies and committees.

The main findings of the preliminary review of world trade developments in 2000 reported in Chapter II include the following:

While all regions reported faster nominal trade growth, exports and imports of developing countries expanded by more than 20%, lifting their share in world merchandise trade to the highest level in the last 50 years. Various factors contributed to this outcome, including the economic recovery in Latin America and East Asia, the sharp rise of oil prices and stronger import demand in developed countries.

The value of world merchandise trade rose by 12.5% in 2000 — twice the average for the last decade — to reach nearly 6.2 trillion dollars. World commercial services trade is estimated to have expanded by 5% (to 1.4 trillion dollars) in 2000, the fastest annual growth since 1997. For the second year in a row, the value of commercial services trade expanded less rapidly than merchandise trade, but for the 1990-2000 period its 6% annual growth matched that of merchandise trade.

In 2001, the world economy is retreating from the high growth path seen last year, dimming the prospects for world trade in 2001. The volume of world merchandise trade is expected to grow by 7%, a marked reduction from the estimated 12% in 2000.

Other highlights from the review of world trade developments are noted below.

• The year 2000 witnessed not only outstandingly high global trade and output growth of 12% and 4%, respectively, but also an exceptionally large excess of trade growth over output growth.
    

• Prices of all internationally-traded goods remained almost unchanged from the preceding year as sharply higher prices for fuels were offset by declines in the prices of manufactured goods. In 2000, prices of manufactures recorded the fifth consecutive annual decline, causing average prices to fall to their lowest level in 10 years.
    

• Real oil prices reached their highest level since 1985 and the share of fuels in world merchandise trade is estimated to have recovered to somewhat more than 10%, close to its share in 1990.
    

• The regions with a large share of fuels in their merchandise exports (the Middle East, Africa and the transition economies) recorded outstanding export growth — between 25 and 50% in 2000.
    

• Asia's merchandise import growth was the strongest of all the regions (23.5%) and exceeded for the second year in a row its export growth.
    

• North America's merchandise import growth (18%) was second only to that of Asia and again stronger than its export expansion (13.5%).
    

• The growth in the dollar value of Western Europe's merchandise exports and imports was by far the lowest of all regions, largely due to the further depreciation of the euro and other European currencies vis-à-vis the dollar.
    

• North America and Latin America recorded both double digit export and import growth for commercial services.
    

• Asian exports of commercial services rose by 13% boosted by the marked acceleration of services export growth by Asia's three leading exporters: Japan; Hong Kong, China and China. The near stagnation of Japan's services imports — which accounts for one third of the Asian regional total — was the principal factor in the subdued expansion of Asia's commercial services.
    

• Expressed in euros, Western Europe's commercial services trade expanded by about 14% which indicates an acceleration in both nominal and real terms. In dollar terms, however, Western Europe's commercial exports and imports decreased slightly.
     

• Oil markets. The sharp oil price variations which, over the last three years recorded their highest and lowest levels in 15 years, have left their mark on international trade flows. The share of fuels in world merchandise exports fell to 6.5% in 1998, the lowest share in three decades but recovered to 10.5% in 2000.
      

• The swings in oil prices have had a dramatic impact on the export earnings of oil exporters. At least 18 fuel exporters recorded total merchandise export growth in excess of 50% and in 2000. For about 30 countries fuels account for more than one third of their merchandise exports. While the developing countries (and also the LDCs) are — as a group — net fuel exporters, the majority of the developing countries are net-importers.
      

• In the second half of the 1990s, Asia replaced Western Europe as the largest net-importing region. This development can be attributed to the buoyant rise of fuels imports into fast growing developing Asia. The Middle East consolidated its position as the world's leading fuel exporter and is likely to strengthen it further in the future.