Sep 9, 1986
DISAPPOINTING THIRD WORLD PERFORMANCE IN 1985.
GENEVA SEP. 6 (IFDA) -- World trade will grow in volume by about 3-1/2 percent in 1986, marginally faster than in 1985, but forecasts are subject to "a particularly large margin of uncertainty", the GATT Secretariat has projected. Reviewing the world merchandise trade in 1985/86, the Secretariat has said world trade increase in value by one percent in 1985 though it grew in volume by three percent. Preliminary figures for first half of 1986 indicate that volume of world trade is growing at same rate as in 1985. The trade performance of a majority to third world countries was "particularly disappointing" in 1985. For third world countries as a group, dollar value of their exports and imports was down by 5-1/2 and 6-1/2 percent respectively. Their share in value of world exports and imports has been falling continuously since 1981, and the share of the third world in total value of world exports "seems certain" to fall again in 1986, because of the big drop in petroleum prices. The declining volume of world fuel trade, and the more recent lower fuel prices, provide most of the explanation for poor trade performance of the third world. But another factor has been the depressed state of the non-fuel primary commodity trade since 1981. Most of the heavily indebted countries, the GATT Report notes, returned in 1985 to the growth-retarding path of import-contraction, add seem likely to carry the process further in 1986. The export earnings of the third world declined in 1985 by 5-1/2 percent. Their imports fell faster, by 6-1/2 percent, with their combined trade surplus reaching 30 billion dollars last year. "The one positive feature of third world performance has been the success in expanding manufactured exports more rapidly than other suppliers", GATT says. From a seven percent aggregate share in mid-1970s, their share in 1985 was 12-1/2 percent, but one-half of a percentage point lower than in 1984. While the manufactured exports is concentrated in a relatively few third world countries, the others too have expanded their manufactured exports. Other than the ten leading third world exporters of manufactures (Taiwan, South Korea, Hong Kong, Brazil, Singapore, India, Malaysia, Thailand, Argentina and Philippines), the other third world countries increased the dollar value of their exports at the same 11 percent average rate since 1973, the same as that of industrial countries. The dollar value of third world imports too have been falling steadily since 1982, and the share of third world in total world imports of manufactures has fallen from 29 percent in 1981 to 22 percent in 1985.