WTO sees sharp slowing of trade growth


China is due to join the World Trade Organization next month

GENEVA, Switzerland (CNN) -- Economic uncertainty means growth in the volume of world merchandise trade this year could drop below 2 percent, compared with 12 percent last year, the World Trade Organization said Thursday.

Releasing its report on international trade statistics, the WTO said 2001's performance was likely to be in sharp contrast to 2000, when merchandise trade expanded at the fastest rate in more than a decade.

The report comes just two weeks before a key meeting of WTO members in Qatar from November 9-13, when trade ministers will try to reach agreement on launching a new round of global trade negotiations.

Australian Trade Minister Mark Vaile told CNN Thursday that an informal meeting of WTO ministers and officials in Singapore earlier this month had made good ground in closing the gaps existing between some nations over a new trade round.

'Strong commitment'

He said there was now a "very strong commitment" to the meeting going ahead in Qatar, and to a new round getting underway.

The WTO gains a significant new member next month with the expected admission of China, which is already the world's 7th largest exporter. Taiwan, ranked No. 14 among exporters, will also be admitted.

The U.S. is the world's largest trading nation, buying and selling more than $2.5 trillion of goods and services last year. It was followed by Germany ($1.3 trillion) and Japan (about $700 billion)

The WTO said Thursday that trade in North America this year was likely to be below the global average of 2 percent, while western Europe would be above 2 percent.

"Japan is certain to experience a contraction in exports, coupled with a moderate growth in imports," it said.

Great uncertainty

It noted that while growth in world merchandise trade was expected to slow in volume terms to only 2 percent this year, even this figure was not assured "given the present great uncertainties about economic and trade developments".

It said its estimates were based on preliminary figures for the first half of 2001. These suggested the deceleration in trade growth would be much sharper than previously expected.

It noted that early in 2001, trade was expected to grow by 7 percent this year.

But this projection had been knocked down by the steep fall in spending on IT products and the slowdown in consumer demand in the U.S. and Europe.