WTO reports resilient strength of world trade

WTO reports resilient strength of world trade    The World Trade Organization Monday said worldwide merchandise trade this year will likely grow 8.5 percent in real terms despite higher oil prices, as compared to 4.5 percent growth in 2003.
   The WTO’s latest annual International Trade Statistics report concludes that the vigorous trade expansion observed in the first half of 2004 is expected to provide enough momentum to raise global trade volume 8.5 percent this year.
   “Growth in world trade in 2004 will not be adversely affected by higher oil prices to any great extent because we are seeing good growth in trade and output in China, Latin America and Africa,” said Supachai Panitchpakdi, director-general of the WTO. “Strong demand is behind rising prices for oil and other commodities and markets appear to be handling this well.”
   The Geneva-based body recognized that price increases for oil and other commodities “may dampen growth in trade and overall output in 2005.” But it said these effects are being outweighed by trade expansion in many countries and stronger than expected recovery in several others, including Japan.
   WTO report’s statistics show that world merchandise trade increased 16 percent in nominal terms to $7.3 trillion in 2003. In real terms, merchandise trade grew 4.5 percent, compared with 3 percent in 2002 and a decline of 0.5 percent in 2001.
   The WTO noted depreciation of the U.S. dollar was not sufficient to stop the rise in the country’s current account deficit in 2003.
   “Although the continued rise in the United States trade deficit helped to sustain output in other regions, it is worrying because any sudden reduction through lower imports could have strong repercussions worldwide,” the WTO warned.
   More than half of Western Europe’s merchandise trade deficit with Asia comes from its trade with China, according to the WTO.
   The WTO reported that Asia’s merchandise exports and imports expanded faster than world trade in 2003.