WORLD TRADE IN 1991 SHOWED DISMAL PERFORMANCE, SAYS GATT.

Mar 19, 1992

WORLD TRADE IN 1991 SHOWED DISMAL PERFORMANCE, SAYS GATT.

GENEVA, MARCH 17 (TWN) – The world's overall growth in trade and production declined for the third consecutive year in 1991 and a successful conclusion to the Uruguay Round is ever more important for the recovery of the world economy, said the Director-General of GATT, Arthur Dunkel.

In his report to the GATT Council meeting Tuesday, Dunkel said that the volume of world trade last year increased by only three percent, the smallest gain since 1983, while the value of merchandise grew by a mere one and a half per cent, compared to a thirteen and a half per cent jump in 1990.

The value of trade in commercial services, though declined sharply, did not suffer as badly as merchandise trade, he pointed out.

Dunkel, however, does not see much prospects in his outlook of the world economy for this year either. Since the predicted pick-up in economic growth for last year did not occur, Dunkel said, it has therefore "increased uncertainty and dampened growth prospects for 1992", and added that "It seems reasonable to expect at best a modestly faster growth of world trade this y year".

But he believes that economic recovery would be further enhanced by the strengthening of the multilateral trading system. "... The course of the Uruguay Round negotiations is playing a role in determining the timing and strength of the recovery from the current slowdown in world economic growth. Success in the current trade negotiations would ... make a tangible contribution to an improved economic outlook for the world economy", Dunkel said.

A look at the performance of individual and groups of countries, however, shows considerable differences in how their fared.

The U.S. and Germany remain the world's leading merchandise exporters, with the U.S. taking the top spot despite recession at home. But he noted the "dynamism" of a number of non-OECD countries in both exports and imports, particularly in Asia, which have shown exceptional growth.

The six non-OECD Asian exporters, for example, reported growth rates between 12-20 percent for exports and 8-30 percent for imports compared to seven and a half percent increase in exports for the U.S. The three leading exporters in Asia are Hong Kong (19.5 percent), Malaysia (18.5 percent) and Singapore (12 percent).

While intra-regional trade contributes to the Asian growth, Dunkel also noted that, for the first time, Western Europe's exports to Asia exceeded its exports to North America.

Among the Latin American countries, Mexico reported "exceptionally fast growth for the third consecutive year", placing it along with other European countries such as Austria and Sweden.

For the group of fifteen highly indebted countries, merchandise exports fell in 1991 for the first time in five years, while trade surplus for the group declined by nearly two-thirds, the Director-General reported. Individual countries such as Nigeria and Venezuela, who are highly dependent on the exports of petroleum, suffer steep declines in their trade surpluses due to the fall in petroleum prices last year.

Among the five regions, only Asia reported growth in both volume and value of trade. The region's share of the world's merchandise trade was close to 25 percent.

The Dunkel report showed that 51 out of the 63 countries, which have undertaken autonomous liberalisation since 1986, are developing countries or former centrally-planned economies. This fact, according to a GATT source, -was also raised by the Indian delegate during the debate at the Council meeting Tuesday, who reportedly have said that he was very "disturbed" to see a lack of reciprocity on the part of the industrialised countries in liberalising their economies.