World trade in 2006 favourable to developing countries

April 13, 2007

The WTO released yesterday its latest figures on world trade.

According to the WTO, world merchandise trade grew 8% in 2006, the second highest performance since 2000. World commercial services exports rose by 11% to $2.7 trillion in 2006 at the same annual pace since 2000. This surpasses the buoyant GDP growth – 5.4% – the world as a whole has witnessed in 2006 (see the IMF’s freshly released World Economic Outlook for latest global economic trends).

A few very interesting trends highlighted by the WTO:

  • Developing countries

“trade expansion in 2006 was very favourable for the developing countries as a group. Their combined merchandise exports rose by 20%, to $4.27 trillion, and imports rose by 17%. The share of developing countries in world merchandise exports reached with 36%, an all-time record level.”

Least-developed countries

“For the least-developed countries, the expansion of merchandise exports has been even stronger than for the developing countries over the last six years, including 2006. Least-developed countries’ exports are estimated to have increased by about 30%, to $108 billion in 2006. Their share in world merchandise exports reached 0.9%, the highest level since 1980 (the first year for which records are kept).”

Africa

“Africa’s merchandise exports rose by 21%, again faster than imports, which are estimated to have increased by nearly 16%. The share of Africa in world merchandise exports reached its highest level since 1990. Although most of Africa’s export growth can be attributed to the rise in oil exports, it is a noticeable development that non-oil exporting African countries increased their exports by about 16%.”

  • China

“Since 2000, China has more than doubled its share in world merchandise exports and ranks as the third largest exporter and importer in merchandise trade. Despite its strong export expansion, China remained the third largest merchandise exporter in 2006. However, in the second half of 2006, China’s merchandise exports exceeded those of the United States for the first time.”

  • World trade in textiles – benefits China and squeezes out many producers but benefits least-developed countries

“In the second year after the phasing out of the Agreement on Textiles and Clothing, the structural changes in world trade of textiles and clothing continued unabatedly. Exporters from developed countries and those from advanced developing economies in East Asia are losing market share, together with major developing suppliers in Central America and the Mediterranean region, which process textiles originating from developed countries. China’s exports continued to gain market share in all major developed import markets despite restrictions introduced in 2005. Some smaller suppliers expanded their textiles and clothing exports even faster than China and the share of least-developed countries in imports of the United States and the European Union increased sharply in 2006.”

  • Europe

“Europe’s real merchandise exports recorded their strongest annual growth since 2000, exceeding import growth (estimated at 7%) but continued to lag behind the global rate of trade expansion. European countries recorded considerable variation in their trade performance. Double-digit export growth can be observed for the countries at its eastern border, ranging from Finland and the Baltic states in the North to Turkey in the South.”

  • United States

“The United States reported its best annual export growth performance (14%) in more than a decade, and although US export growth exceeded its import growth (11%), the merchandise trade deficit had grown already so large that it continued to grow in 2006.”

  • The big winners of the commodity boom

“the Commonwealth of Independent States (CIS) recorded the most dynamic export and import growth in 2006. Benefiting from strong fuel and metal prices on world markets, the region’s exports increased by one-quarter last year to $422 billion, more than twice the level recorded only three years ago.”

  • The laggards

“Moderate and sluggish export value growth of less than 10% was reported by Japan (9%), France (6%), Spain (7%) and Ireland (3%).”

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