MercoPress. South Atlantic News Agency

World trade remains stagnant.

World trade expanded 3% in real terms during 2002, half the annual average rate of the last decade according to a report from the World Trade Organization, “World Trade Statistics 2003” released in Geneva.

The report indicates that in spite of a modest recovery, particularly following the retraction of the fourth quarter last year, prospects for this year are not encouraging and are forecasted in the range of 3%.

During the first six months of the current year world trade in US dollars expanded 15%, an impressive advance over the 4% of 2002, but once the depreciation of the US currency is taken into account, results are far more modest.

Goods and services exports of the industrialized countries remained unchanged since the fourth Q of 2002 until mid 2003. It was actually Asia, transition economies and the US that helped boost world trade.

WTO experts point out that "a drop in US exports and an increase in imports have generated a significant balance of trade and current account balance deficits".

China's trade on the other hand has expanded three times as fast as world trade and has turned the country into one of the world's main players together with the US, European Union and Japan.

Western Europe countries managed a minimal trade expansion last year while Latinamerica experienced an important contraction, particularly imports.

Three are the main causes identified by the report as contrary to trade expansion: the SARS scare in Asia, the Iraq conflict and continued instability in the Middle East.

The SARS virus, acute respiratory syndrome, caused uncertainty in East Asia and was particularly severe for tourism and air travel following the World Heath Organization warnings about travelling to areas with SARS cases.

Violence in the Middle East has had a direct impact in higher energy prices and the global recovery.

With the release of the report WTO Director General Supachai Panitchpakdi appealed to country members the urgency of a return to the multilateral negotiations round started in Doha in November 2001, but blocked since the collapse of the ministerial meeting in Mexico last September.

"The almost stagnation of world trade growth in the first half of 2003 underlines the urgency for governments to return to negotiations and build a stronger and more dynamic trade system", said Mr. Supachai.

WTO forecasts that world trade this year will expand 3%. In 2001 world trade growth for the first time in twenty years was negative in volume (-1,5%) following a record 11% expansion in 2000.