Global trade fell last year for first time since 1982

World Trade Organization expecting no more than scant recovery this year

May 02, 2002|By BLOOMBERG NEWS

WASHINGTON - Global trade declined last year for the first time since 1982 and will barely recover this year as economic growth remains sluggish, the World Trade Organization said yesterday.

"The lowest growth in output in more than two decades and a decrease in trade flows represented a major reversal" from 2000, when trade surged 11 percent, its fastest pace in a decade, the WTO said in a report.

Trade dropped 4 percent in value last year, to $6 trillion, and fell 1 percent in volume, pulled down by the two biggest economies, those of the United States and Japan, the WTO said. Trade volume is expected to increase 1 percent this year, said the organization.

The WTO said in another report that its 144 member nations filed 320 anti-dumping complaints, a 15 percent increase that analysts said reflects a wave of protectionism and a weak worldwide economy.

The United States and India filed more cases than any other countries, accounting for almost half of the complaints filed. The nation hit hardest by complaints was China.

The WTO, which supervises world commerce, said a solid rebound in trade this year "is not the most likely outcome given the moderate output gains in major markets" and "more sober prospects" for the information technology industry compared with the 1990s.

Though worldwide sales of semiconductors fell 29 percent to $146 billion last year, the WTO pointed to signs that the industry is gradually recovering.

Intel Corp., the world's largest maker of computer chips, said last month that sales in the three months that ended March 31 rose for the first time since 2000.

Taiwan Semiconductor Manufacturing Co., the world's biggest maker of chips for other companies, said this week that first-quarter profit fell less than expected and second-quarter earnings will be higher as orders rebound.

Japan's export values fell 16 percent last year as the yen depreciated, and Asia's exports declined for the first time in 25 years as demand dwindled for its main products, office and telecommunication equipment.

U.S. exports shrank by 5 percent last year because of the dollar's strength, curbing demand for U.S. products, including automotive exports, which fell 7.5 percent, said the report.

The increase in cases against dumping - or the sale of goods overseas below the cost of production - reflects the fact that developing countries have discovered how to use these laws as a hedge against foreign competition, analysts said. That's reflected in the rising number of anti-dumping complaints filed by India, Argentina, Brazil and South Africa.

Last year, the United States filed 74 complaints alleging companies in other countries were dumping, while India filed 67. Those numbers dwarfed the third-most active filer, the 15-nation European Union, which began 28 actions.

The 320 cases filed by WTO members were an increase from 280 in 2000.

China was hit by 47 trade complaints, with the bulk involving steel. China has been affected this year by the U.S. decision to set tariffs of as much as 30 percent on some steel imports.

Sun Zhenyu, China's ambassador to the WTO in Geneva, warned that his nation's steel exports have been "seriously affected" by the U.S. action.

China has joined with the EU, Japan, South Korea and other countries in asking the WTO to rule the U.S. tariffs illegal.

Global economic growth slowed last year to 2.5 percent from 4.7 percent in 2000, according to the International Monetary Fund. The expansion will be only 2.8 percent this year, the IMF said this month.

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