WTO expects slowdown in world trade

WTO expects slowdown in world trade    A marked slowdown in overall economic growth that began in the second half of 2004 is likely to moderate the expansion of world merchandise trade from 9 percent in 2004 to 6.5 percent in 2005, according to economists at the World Trade Organization.
   The Geneva-based trade body said Thursday that changes in global GDP growth typically lead to even larger changes in global trade growth, and that global trade growth will decelerate this year as a result of the slower global economy.
   In the last six months of 2004, “economic growth slowed down markedly in Europe and Japan, while in the United States and a number of large developing economies (e.g. China and Brazil), GDP growth remained vigorous,” the WTO said. In the second quarter of 2004, trade in goods and services in the Organization for Economic Cooperation and Development countries expanded at an annual rate of 12 percent, but this fell to 6 percent in the third quarter and 4 percent in the fourth quarter, the WTO reported.
   At the global level, the WTO expects a weakening of economic activity that should result in the global economy growing by about 3 to 3.5 percent this year.
   Looking back, WTO said 2004 was characterized by “vigorous global trade growth” and rising oil and commodity prices that helped developing countries boost their exports. “Developing countries saw their share in world merchandise trade rise sharply in 2004 to 31 percent, the highest since 1950,” the WTO said.
   “Africa’s exports, for example, grew by an impressive 30 percent last year, after rising strongly in 2003,” a WTO spokesman said. This was attributable in significant measure to commodity price rises, and marked the highest growth in African exports since 1980.