Trade monitoring
Technical notes
This Note details the definitions methods and sources of the statistics used in International Trade Statistics 2003.
World trade developments in 2002 and prospects for 2003
In 2002 world trade recovered from its steep decline in 2001. From the first through the third quarter world trade expanded strongly but stalled in the fourth quarter of 2002. The average annual rate of merchandise trade expansion in 2002 was therefore limited to 3% in real terms only half the rate observed in the 1990s.
International Trade Statistics 2003
The International Trade Statistics 2003 contains up-to-date statistics on trade in merchandise and commercial services for an assessment of world trade flows by country region and main product groups or service categories.
Conclusion
This Report has ranged widely. The Executive Summary attached to the beginning of the Report outlines the main areas covered and observations made. A report of this nature is itself a summary of complex issues and has to rely heavily on the more detailed and analytical work of others. References have been made in the text to this work. Many of the issues addressed here are “moving targets” particularly where governments are constantly exercising policy options that exert an influence on outcomes and where WTO Members are actively engaged in a major trade negotiation.
Foreword
The World Trade Report is a new annual publication produced by the WTO Secretariat. Each year the WTR will explore trends in world trade and highlight important issues in the world trading system. In addition to monitoring and interpreting trade developments the Report seeks to deepen public understanding of pressing policy issues. The WTR does not pretend to provide comprehensive answers to complex and many-sided questions subject to continuing debate among governments and their constituencies. Rather by explaining the origin of issues and offering an analytical framework within which to address them the WTR aims to contribute to more informed discussion and a better appreciation of the options available to address policy challenges.
Acknowledgements
The World Trade Report has been written under the general direction of Patrick Low Director of the Economic Research and Statistics Division. The main authors of the Report are Bijit Bora K. Michael Finger Marion Jansen Alexander Keck Patrick Low Hildegunn Nordas Roberta Piermartini and Robert Teh. Trade statistics and tariff information were provided by the Statistics Group of the Economic Research and Statistics Division co-ordinated by Guy Karsenty Julia de Verteuil Andreas Maurer and Jürgen Richtering.
Recent trends
International trade rebounded in 2002 from its contraction in the preceding year growing at about 2.5 per cent in volume terms which was faster than the growth of global output. The rebound occurred despite the weakness of the global economic recovery greatly reduced capital flows major changes in exchange rates increased restrictions on international trade transactions to mitigate risks from terrorism and rising geopolitical tensions. Trade growth was strong in Asia and the transition economies largely reflecting better economic performance in those regions. However trade was stagnant in Western Europe and contracted in Latin America as a result of economic turmoil in a number of countries in the region. North America’s imports recovered in line with stronger domestic demand while exports continued to decrease in 2002.
Executive summary
At the Fourth World Trade Organization Ministerial Meeting held in Doha in November 2001 Ministers launched a comprehensive set of multilateral trade negotiations and a work programme. This mandate is sometimes referred to as the Doha Development Agenda reflecting a shared desire to ensure that the trading system is relevant and responsive to the needs of developing countries. Among the areas covered by the negotiations or the work programme are market access in manufactures agriculture and services certain rules (including anti-dumping subsidies and countervailing measures and regional arrangements) trade and environment trade-related intellectual property rights the relationship between trade and investment the interaction between trade and competition policy transparency in government procurement trade facilitation and dispute settlement. Developing countries were particularly instrumental in putting certain issues on the agenda including trade and technology transfer trade debt and finance small economies implementation issues (mostly pending from the Uruguay Round) and special and differential treatment. Views continue to differ on how and in some cases whether to include all the issues mentioned above in the negotiations which are due for completion at the end of 2004.
Selected issues in trade and trade policy
South-South trade has long been promoted as a means to reduce the dependence of developing countries on markets of developed countries and to enhance diversification of Southern exports beyond primary commodities. Most of the mechanisms that were created to foster co-operation among developing countries were largely subregional and regional arrangements many of them preferential in nature. During the 1950s and 1960s the promotion of South-South trade was in many instances part of a set of policy measures anchored in a strategy of import substitution behind high trade barriers. South-South trade grew in spurts as developing country economies went through stop and go cycles. Despite efforts to promote and diversify South-South trade primary products continued to dominate these flows in most regions and by 1990 South-South trade accounted for only 6.5 per cent of world trade.
The Doha Development Agenda
An underlying objective of the WTO is to promote economic development through effective participation in world trade. Three aspects of the WTO’s structure and rules are relevant to the question of how developing countries can derive greater benefits from participation in the trading system. First the rules themselves together with permitted exceptions and interpretations are the foundation of the system and play a key part in determining the conditions and opportunities of trade. Second there is the question of the coverage of the system. No examples exist of topics that the WTO has taken up and then discarded so this is about the inclusion of new areas. Third the pattern of protection facing a country’s exports also goes a long way in defining trading conditions and opportunities. In short the nature of WTO rules the reach of these rules and conditions of market access are the three major areas that determine the quality and utility of the WTO for its Members. Not surprisingly each of these three elements features prominently in the Doha Development Agenda.
World Trade Report 2003
The World Trade Report is a new annual WTO publication focused on trade trends and policy issues. The 2003 edition examines developments in South-South trade trends in commodity markets and the growth of Regional Trade Agreements.
The role of trade and trade policy in the development process
Different aspects of the development process have been emphasized by the many scholars and observers who have ventured into this field. The seminal work of Sen (1999) identifies freedom as both the primary end and principal means of development. The Brundtland Commission stressed that development must involve the care and nurturing of the environment for future generations. Others have focused particularly on poverty reduction and the empowerment of poor people. All these approaches consider economic growth a vital component of the development process while emphasizing that development is about more than growth.
Organization, secretariat and budget
The World Trade Organization came into being in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT) which had been established (1947) in the wake of the Second World War. The WTO’s main objective is the establishment of rules for Members’ trade policy which help international trade to expand with a view to raising living standards. These rules foster non-discrimination transparency and predictability in the conduct of trade policy.
Overview of developments in the international trading environment
WTO Members agreed in Doha in November 2001 to put in place a comprehensive agenda for negotiation and future work the Doha Development Agenda (DDA). The agreed agenda aims at further strengthening and liberalizing the multilateral trading system including by dealing with unfinished business on market access. Members also welcomed the Peoples’ Republic of China and Chinese Taipei as the 143rd and 144th Members of the WTO. Both of these successes boosted confidence in the commitment of Members to cooperate within the multilateral trading system particularly in support of the further participation of developing countries in the system. In this context it is worth noting that developing countries that have increased their integration into the world economy do better in growth and income-per-capita terms than those whose integration has lagged; it is realized by many including least-developed countries (LDCs) that openness and participation in the rules-based system provides a stimulus to competition and more efficient resource allocation in furtherance of growth and development objectives. Success in the DDA will support these objectives.
Overview
The year 2002 has been a very active one for the World Trade Organization. Intensive and substantial negotiations under the Doha Development Agenda launched in November 2001 began in earnest. The WTO Secretariat has been supporting these negotiations alongside its regular work in undertaking trade policies reviews dispute settlement activities accessions and outreach to parliamentarians and civil society. The Secretariat has taken on a much more central role in providing technical assistance and capacity-building activities to its Members and ensuring policy coherence with other international agencies. Preparations also got underway for the WTO’s Fifth Ministerial Conference which will be held in Cancún Mexico in September 2003.
Annual Report 2003
The 2003 edition of the WTO Annual Report focuses on the first full year of negotiations under the Doha Development Agenda.
Overview
From the WTO perspective the year 2001 was above all the year of the Doha Ministerial Conference a turning point in the history of the WTO and in relations between developed and developing countries. In light of the tragic events of 11 September and its aftermath the mere fact that the Ministerial Conference could be held at Doha Qatar in November 2001 must be seen as a success. That Ministers in addition could agree the launch of a new round of trade negotiations is a recognition of the importance to the global economy of stimulating trade and development. It also brought to an end the uncertainty created by the frustrating failure at Seattle two years earlier. Last year was also one in which we concluded the accession of China Chinese Taipei Lithuania and Moldova to the WTO welcoming more than one quarter of the world’s population into our membership.
Overview of developments in the international trading environment
Although the path of world trade growth has been uneven in the past few years (contraction in 1998 rebound in 1999 and 2000 followed by a slowdown in 2001) the fact that trade continued to expand faster than output is indicative of the increasing openness of national economies. Part of this development is due to the gradual but continued trend towards more liberal trade policies around the world. Fears that the failure of the Third Ministerial Meeting in Seattle to agree on an agenda for a new trade round would lead to a resurgence of protectionism have not by and large materialized. This is a tribute to the good sense of governments in conducting their trade policies. But credit also goes to the strength of the multilateral rules under the WTO as well as commitments made under regional trade arrangements which have made it more difficult to take protectionist measures. Members also agreed at their Ministerial Meeting in Doha in November 2001 to build on these achievements and to put in place a comprehensive work programme to strengthen further the multilateral trading system. The recent accessions of the People’s Republic of China and Chinese Taipei as the 143rd and 144th Members respectively of the WTO will further strengthen the role of the multilateral trading system and the import of the upcoming negotiations.
World trade developments
The widely expected slowdown in the expansion of world output and trade turned out to be much stronger than most observers had projected at the beginning of the year 2001. Global output increased only marginally and world trade decreased somewhat both developments in sharp contrast to the preceding year when both trade and output expanded at record rates.
Annual Report 2002
The Annual report of the WTO focuses on the regular activities of the organization the details of its current structure staff and budget. The Annual report is published in the first half of each year.
Organization, secretariat and budget
The World Trade Organization came into being in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT) which had been established (1947) in the wake of the Second World War. The WTO’s main objective is the establishment of rules for Members’ trade policy which help international trade to expand with a view to raising living standards. These rules foster non-discrimination transparency and predictability in the conduct of trade policy.
Overview of developments in the international trading environment
For the WTO the year 2000 was one of stiff challenge and significant opportunity. Stiff challenge due to the events that took place at the Third Ministerial Conference in November 1999 -the failure of the WTO Members to reach a consensus on the launch of a new round of multilateral negotiations against a background of highly-publicized "anti-globalization" demonstrations in the streets of Seattle - but significant opportunity to effect the changes necessary to better meet the needs of the WTO Members and thereby strengthen the foundations of the trading system.
Overview
The year 2000 and the first part of 2001 was a busy and productive period for the WTO with most activities falling into one of four categories: first the launching of new negotiations on trade in agricultural products and trade in services; second a broad range of ongoing activities that constitute the WTO’s day-to-day work such as accessions and the settlement of disputes between the member countries; third the adoption of new measures to assist the WTO’s least developed Members; and fourth progress in dealing with issues arising out of the December 1999 Seattle Ministerial meeting including renewed efforts to launch a comprehensive round of multilateral trade negotiations.
WTO activities
An important task facing the WTO is that of making the new multilateral trading system truly global in scope and application. The 140 Members of the WTO (as of 31 December 2000) account for more than 90% of world trade. Many of the nations that remain outside the world trade system have requested accession to the WTO and are at various stages of a process that has become more complex because of the WTO’s increased coverage relative to GATT. With many of the candidates currently undergoing a process of transition from centrallyplanned to market economies accession to the WTO offers these countries - in addition to the usual trade benefits -a way of underpinning their domestic reform processes.
Annual Report 2001
The Annual report of the WTO focuses on the regular activities of the organization the details of its current structure staff and budget. The Annual report is published in the first half of each year.
World policy development in 1999
Notwithstanding the outcome of the WTO’s Third Ministerial Conference in Seattle the state of the world trading environment remained generally sound in 1999. There have been no major trade policy reversals during the year and there is no evidence of a resort to protectionist policies. On the contrary a number of countries have undertaken concrete measures to further liberalize their economic and trade regimes. Autonomous and regional initiatives during the year have provided additional impetus to trade liberalization and further integration of the world economy. At the multilateral level much of the effort focused on preparations for the Third Ministerial Conference including the possible launching of a new round of multilateral trade negotiations. Although the latter did not materialize much progress was achieved in narrowing the gaps in some major areas. At the same time the WTO has proceeded with its core agenda of trade liberalization.