OVERVIEW OF WORLD TRADE

Trade has been one of the most buoyant international economic activities in recent period. World merchandise trade has been consistently growing at rates higher than rates of growth in global output in the nineties. The world merchandise trade grew by an average rate of 6% during the period 1990-95.

The trade growth slowed in the year 1998 as the Asian crisis deepened and its repercussions were felt increasingly outside Asia. The volume of world merchandise exports grew by 3.5% in the year 1998 after an outstanding growth rate of 10.5% in 1997. All major regions experienced a marked slowdown of their trade growth in 1998. 

Trade performance in 1998 differed widely among regions. While oil-exporting regions recorded the strongest annual value declines in merchandise exports, countries directly affected by the Asian financial crisis reported the stinger import decline. The contractionary forces of the Asian crisis and falling commodity prices were attenuated by the robustness of continued economic growth in the United States and strengthened demand in Western Europe. All regions recorded a lower export expansion in 1998 than 1997. The transition economies and the Latin America recorded the strongest export volume growth. Asia's export volume increased marginally, as the strong contraction of intra-Asian trade was only just offset by a sharp rise in extra regional flows. Western Europe's export growth remained above the global average of 3.5% and North America's export growth fell below the average.

As far as import is concerned, Western Europe, the largest regional trader, was the only region not to record a deceleration in import growth in the year 1998. Western Europe's import growth rate of 7.5% was less than the 10% rate recorded by North America, Latin America and the transition economies. The imports into Asia fell by 8.5%. The stagnation or decrease in import volumes is estimated for Africa and the Middle East. 

Services are becoming a significant component in global trade. The value of commercial services increased from US $ 1275 billion to US $ 1320 billion in 1996 to 1997. It fell down to US $ 1290 billion in the year 1998.