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PRESS/401 
14 April 2005 
 
(05-1488) 
WORLD TRADE 2004, PROSPECTS FOR 2005 
Developing countries’ goods trad e share surges to 50-year peak 
Riding a wave of higher oil and commodity pric es, and vigorous global trade growth including 
recovery in trade in office and telecom equipment, developing countries saw their share in world merchandise trade rise sharply in 2004 to 31%, the highest since 1950, according to WTO figures 
released on 14 April 2005. 
 However a marked slow-down in overall economic gr owth that began in the second half of 2004 is 
likely to decelerate world merchandise trade growth from 9% in 2004 to 6.5% in 2005, WTO 
economists say.  
“As trade continues to play a growing role in economic activity, it is increasingly important for 
development and poverty alleviation. An ever-gro wing number of countries are both trading more 
and participating more actively in setting the trading rules.” said Director-General Supachai 
Panitchpakdi. 
 “Africa’s exports, for example, grew by an impre ssive 30% last year, after rising strongly in 2003. 
Attributable in significant measure to commodity price rises, this marks the highest growth in 
African exports since 1980. This trade growth has b een associated with an improved expansion in 
production, which registered more than 4% growth for the continent in 2004. Forecasters predict a 
comparable growth rate in 2005,” he said. 
 “It is through trade that countries can chart a path towards sustainable development and a higher 
standard of living. While the trend is encouraging,  trade expansion is still hampered by barriers, 
which must be brought down. These barriers exist in all WTO members and are a drag on economic growth. The best way to reduce these barriers and to ensure more equitable trading 
rules for all nations is to complete the Doha Deve lopment Agenda round of trade negotiations,” Dr 
Supachai said.  
Highlights: major trade developments in 2004 
A surprisingly strong global economy boosted real world merchandise trade growth  in 2004, 
despite record high crude oil prices. The rate of trade expansion was close to 10% at mid-year, but decelerated in the second half in line with weaker global GDP growth. PRESS/401 
Page 2 of 17 
 
  
Nominal merchandise trade growth  (21%) was the highest in 25 years due to a combination of 
strong real trade growth (9%) and a sharp increase in dollar prices (11%).   
In 2004, the dollar value of world trade in commercial services  increased by 16%. The 
expansion of services trade was stimulated by strong recovery in transportation and travel services. 
 
Commodity prices  again increased faster than prices of manufactured goods in 2004. Prices for 
fuels and metals expanded by more than 30%, according to the IMF commodity price index. Prices 
for beverages and textile fibres, however, were mu ch weaker, recording only a marginal increase 
in 2004.  
Price developments largely determined the value of merchandise trade growth by region . The 
regions/countries with a large share of fuels in their merchandise exports recorded above average export growth in 2004 — that is, the Middle East, Africa and the Commonwealth of Independent 
States (CIS). In the case of the CIS, very strong  economic growth also contributed to a recovery 
of CIS trade inside the group.  
Asia’s merchandise trade growth was sustained by strong US import demand, and intra-Asian 
trade, stoked by a recovery in electronics trade. In 2004, China became the largest merchandise trader in Asia, and the third largest exporter in world merchandise trade. It was already the third 
largest importer in 2003. 
 North America recorded the weakest growth in nominal merchandise exports and imports of all 
regions in 2004. North America is the only one of the seven major regions distinguished in this 
report which recorded a trade deficit on a f.o.b.-f.o.b. basis in 2004. The United States alone had a merchandise trade deficit of $618 billion (f.o.b.-f.o.b. ), equivalent to a record 6% of US GDP, and 
also to 7% of world merchandise trade. 
 The enlargement of the European Union to 25 members in May 2004 stimulated trade between the 
new and the old members of the European Union. Including intra-trade, the enlarged European 
Union accounted for 42% of world merchandise exports and for 52% of world commercial services exports in 2004. 
 
Europe was the only region for which the growth in the dollar value of merchandise and services trade did not exceed the previous year’s level, but this was due entirely to exchange rate 
movements. Measured in euros, Europe’s merc handise and commercial services exports (and 
imports) rose faster in 2004 than in 2003.   
Higher oil prices improved the terms of trade of developing countries  as a group, and in 
particular those of the developing regions of th e Middle East, Africa and Latin America. Strong 
commodity prices and the recovery in the trade of office and telecom equipment resulted in a 
sharp increase in the merchandise exports fr om developing economies. The share of the 
developing economies in world merchandise exports was 31% in 2004 — the highest level since 1950.  
 
Trade and output: 2004 expansion above the long-term growth trend 
The world economy grew at 4% in 2004, the strongest annual growth rate in more than a decade. Global GDP last year was also more broadly based regionally than in the three preceding years, 
providing a solid foundation for an acceleration in world trade growth. World merchandise trade PRESS/401 
Page 3 of 17 
 
 
rose by 9% in real terms in 2004, the best a nnual performance since 2000, and more than twice 
as fast as world output (GDP measured at market rates) in 2004. Trade growth in 2004 also 
significantly exceeded average trade growth recorded over the last decade (see Chart 1 below, Table 1 on page 4).  
 
Chart 1 Growth in the volume of world merchandise trade and GDP, 1994-04 
(Annual percentage change) 
 
Source : WTO 
 
At 7% and 8% respectively, developing Asia an d the Commonwealth of Independent States (CIS) 
countries continued to report the strongest regional GDP growth worldwide. South America 
recorded GDP growth of 6%, which represented not only the strongest improvement against the 
preceding year among regions, but also the high est growth rate since 1986. Africa and the Middle 
East registered GDP growth of approximately 4% in 2004. This was faster than in the 1990s, and 
about the same rate as the global economy. North America’s growth strengthened to 4.3%, 
exceeding its expansion rate in the last two decades, which averaged slightly above 3%. Economic activity picked up in Europe and Japan, but growth remained at 2.3% and 2.6% respectively in 
2004, which was much weaker than the performa nce of all other regions. The weakness of 
European growth was concentrated in the euro area, which recorded GDP growth of only 2%.
1 
 
Per capita income increases do not necessarily reduce unemployment rates nor poverty. However, 
the strength of the economic expansion improved the employment situation in North and South America, in the Commonwealth of Independent States (CIS), and in Asia in 2004. Among the 
major developed countries, unemployment levels decreased in Australia, the United Kingdom, the 
United States and Japan, but stagnated at high levels in the euro area.
2 According to the Economic 
Commission for Latin America and the Caribbean (ECLAC), urban unemployment decreased overall 
                                               
1  A new regional breakdown has been introduced and is applied for the analysis of international trade 
flows. The change in the country composition of re gions was triggered by the enlargement of the EU 
in May 2004 which made the former grouping of “Western Europe” and “transition economies” 
redundant. Another major change has been made for the Americas, by including Mexico in North 
America, and the creation of a new region — South and Central America (including the Caribbean).  
2  OECD(2004), OECD Economic Outlook, Volume 2004/2, No 76, December 2004. –2 0 2 4 6 8 10 12 
1994 95 96 97 98 99 00 01 02 03 2004 World GDP 
Merchandise exports 
Average GDP growth 
1994-2004 Average export growth 
1994-2004 PRESS/401 
Page 4 of 17 
 
 in Latin America, as the high unemployment rates prevailing in Argentina, Brazil, Colombia and 
Venezuela were significantly reduced in 2004.
3 
 
Table 1 World trade and output developments, 2001-04 
(At constant prices, annual percentage change) 
 
    2001 2002 2003 2004 
Merchandise exports  –0.5 3.5 5.0 9.0 
Merchandise production  –0.7 0.8 2.8 … 
      GDP at market exchange rates   1.4 1.8 2.6 4.0 
GDP at PPP   2.4 3.0 3.9 5.0 
Sources : WTO, IMF, World Economic Outlook 
 
Monetary and fiscal policies continued to accommodate the recovery in most regions. Real interest rates remained very low and public deficits remained relatively large in the major economies. 
However, fiscal deficits did not widen further in 2004. Stock markets recovered markedly in the 
course of the year.
4  
 
The moderate increase in global foreign direct investment (FDI) inflows in 2004, after a steep fall 
over three years, also suggests improved busine ss confidence in the state of the world economy.5 
The United States, a number of Asian developing countries, and also some Latin American and 
Caribbean countries were the principal beneficiaries of the increase in global FDI flows. Despite the 
recent recovery in FDI flows, the 2004 level of some $600 billion was less than half the peak level recorded in 2000 and still below the level reached in 1998. One of the new developments in global 
FDI flows was the emergence of China as an investor in natural resources in a number of 
developing countries.
6 Total capital flows to emerging developing markets outside Europe 
increased in 2004, according to estimates made by the Institute of International Finance.7 
Increased net FDI inflows and private lending, toge ther with a decrease in net official outflows, 
contributed to the marked rise of foreign exchange reserves in these economies.  
Domestic inflation picked up moderately in the course of 2004, under the impact of strengthened 
economic activity and the increase in world fuel prices. The repercussions of higher oil prices on 
the domestic price level was attenuated in many countries by a currency appreciation vis-à-vis the 
US dollar, and in some cases by government me asures, including price controls for petroleum 
products sold in local markets. Dollar prices of internationally traded goods increased by 11% in 2004. The overall increase in commodity prices by about 25% conceals wide differences among 
various product groups. Prices of fuels and metals recorded a marked increase in the course of 
2004, lifting their average annual prices by 31% and 36% respectively. Rising global demand, combined with a decline in readily available reserves and the absence of excess production 
capacity, provided the basis for stronger oil prices.
8 Unexpectedly strong demand from China in 
                                               
3  Economic Commission for Latin America and the Caribbean, Preliminary Overview of the Economies 
of Latin America and the Caribbean, 2004. 
4  In respect of stock markets, the Morgan Stanley Capital International Index reported an increase of 
10.6%, and the Citigroup World Government Board Index recorded a total return of 9.6% on 
December 31, 2004, according to Th e Economist, 15–21 January 2005. 
5  UNCTAD, Press Release 11 January 2005. 
6  China’s foreign direct investments abroad are no t limited to primary commodities. Other significant 
investments have been reported, for example, in the auto and computer sectors. 
7  Institute of International Finance, Capital Flows to Emerging Markets , 19 January 2005. 
8  Global oil demand rose by 3.3%, to 2.66 million barrels per day in 2004, according to the 
International Energy Agency (IEA), mo nthly Oil Mark et Report, January 2005. PRESS/401 
Page 5 of 17 
 
 
the course of the year, geopolitical tensions, and temporary selective transportation bottlenecks 
provoked large variations in monthly price developments.9 Nominal oil prices reached $55 per 
barrel in November, a record monthly level. The annual average crude oil price rose to $36 per 
barrel in 2004, and matched the previous historic peak level of 1980. Deflated by the world 
merchandise export price index (base year 2000), the “real” oil price stood at $30 in 2004, double 
the level of 1995, and the highest level since 198510 (see Chart 2 below). 
 
Chart 2 Crude petroleum price developments, 1970-04 
US$/barrel 
 
Note: Real price is obtained by deflating the nominal IM F crude oil spot price by the WTO world export unit 
value index (2000=100). 
 
Prices of agricultural raw materials and beverages,  however, rose by only 3–6% while food prices 
went up by 14%. Prices of manufactured goods are estimated to have risen by 8.5% on average in 
2004. There were marked differences in the price developments of manufactured goods, not only 
regionally but also by product categories. Dollar prices in countries with an appreciating currency 
have recorded a much faster price increase in their exports of manufactured goods than those with 
a stable exchange rate vis-à-vis the US dollar. As regards relative price developments of the 
different product groups, it can be observed that the prices for iron and steel products surged, while those of computer and telecom equipment decreased. For iron and steel, strong global 
demand from the construction and investment goods industries, together with sharply higher 
prices of ores used as inputs, caused the steep price increase. For computer and telecom equipment, productivity gains and capacity expans ion more than offset higher demand. Exports of 
chemicals, in particular organic chemicals and pl astics, recorded price increases which exceeded 
those of all manufactured goods.  
                                              
 
9  OECD (2004) and IEA, monthly Oil Market Reports. 
10  There are different approaches to calculating the “real” oil price. Sometimes the nominal oil price is 
deflated by the US GDP deflator, and in other ca ses by the export unit value index of manufactured 
goods of developed countries. In  reviewing global trade flows, the world export price index is 
considered to be the most appropriate deflator. 0 5 10 15 20 25 30 35 40 45 
1970 1972  1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Nominal  
Real PRESS/401 
Page 6 of 17 
 
 Prices, exchange rates and demand developments have all influenced global trade flows measured 
in dollar terms during the year. Higher oil and me tal prices sharply increased the share of fuels, 
metals and iron and steel in world merchandise exports, to a new cyclical peak level. The Middle East, Africa and the CIS member countries are la rge net exporters of fuels and metals, and their 
share in world merchandise trade recovered further in 2004, largely due to these price 
developments. As developing Asia and South Americ a also recorded merchandise export growth in 
excess of 25% in 2004, the share of the developi ng economies in world exports reached 31%, 
their highest level since 1950. 
 The strength of developing Asia’s merchandise exports can be attributed partly to recovery in the 
electronic goods sector.
11 Global shipments of digital cameras, mobile phones, semiconductors and 
personal computers expanded at double digit rates. For five Asian economies, office and telecom equipment accounted for between one-third and two- thirds of their exports in 2004, and played an 
important part in their export expansion.
12 
 
Chart 3 Dollar changes vis-à-vis European and Asian currenciesa, 2001–04 
(Indices Jan 2001=100) 
 
a Currency baskets weighted by trade values. European currencies are those of Euro  Area, the UK, Switzerland 
Sweden, Norway, Bulgaria, Czech Rep, Estonia, Hungary, Latvia, Lithuania,  Poland, Romania and Slovak Rep. 
The Asian currencies are those of Japan, China, Rep of Korea, Chinese Taipei, Singapore and Hong Kong, China 
Source : WTO 
 
Exchange rate developments contributed strongly  to the nominal trade growth in Europe in 2004 
although less than in 2003. The annual average depreciation of the US dollar against a basket of 
European currencies was 9% in 2004, which was much stronger than against a basket of Asian 
currencies (see Chart 3 above).  
                                              
 
11  Worldwide mobile phone shipments rose by 29. 3%, to 665 million units in 2004 according to IDC 
Press Release, 27 January 2005. Un it shipments of personal comp uters recovered worldwide by 
11.6%, to 183 million in 2004 according to Gartner,  Press Release, February  2005. Global sales of 
semiconductors advanced by 28%, to $213 billion in  2004 according to the Semiconductor Industry 
Association, Press Rele ase, 31 January 2005.  
12  The five Asian economies are: Malaysia, the Philippines, Singapore,  Chinese Taipei and the Republic 
of Korea. 70.0 
2001 2002 2003 2004 70 
2001 2002 2003 2004 80.0 90.0 100.0 110.0 
80 90 100 110 
Europe Asia PRESS/401 
Page 7 of 17 
 
 
Real merchandise trade developments in 2004 
The Asian region recorded the highest volume of real merchandise export growth in 2004, at 14.5%. China, the Republic of Korea and Singapor e recorded rates in excess of 20%. Japan’s real 
merchandise exports rose by 11%, somewhat faster  than world trade. Asia’s merchandise import 
growth rose 14.5% in 2004, an acceleration in comparison to the preceding year. At a regional 
level, merchandise import growth accelerated and matched the export expansion but at the country level large differences in export and import growth could be observed. Japan and the 
Republic of Korea report a markedly larger real export growth than import growth in 2004 while all 
other Asian economies combined expanded their imports in constant prices faster than their exports. 
 
Linked to its economic recovery, South America’s real merchandise trade rebounded vigorously in 
2004. Real imports expanded nowhere faster than in this region. However, a number of economies 
in Central America and the Caribbean did not participate in this outstanding trade expansion, 
which was largely shaped by the region’s major traders. Real merchandise imports in South America grew by 18.5%, which was twice as fast as world trade in 2004. Argentine and 
Venezuelan imports recovered dramatically, rising by at least 50%, while those of Brazil and Chile 
expanded by 20%. The region’s export growth fell short of its import expansion, largely due to the 
sluggishness of exports from major traders such as Argentina and Colombia, and the incomplete 
recovery of shipments from Venezuela. Merchand ise trade growth in the smaller economies of 
Central America and the Caribbean remained well below the regional average for both exports and 
imports. 
 
Africa’s trade grew strongly in 2004. Exports grew by some 6% and imports by approximately 11% in real terms. Real export growth was about the same as in 2003 and much higher than in 
2001 and 2002. On the import side, however, real growth in 2004 was considerably higher than in 
previous recent years. Nominal growth in African exports was, of course, dramatically higher in 2004 than in previous years because of oil price rises (discussed on page 9). 
 
Merchandise exports and imports of the CIS continued to rise in real terms at a pace considerably faster than world trade. Benefiti ng from sharply higher world market prices for fuels and metals, 
which contributed to a sharp rise in export earnings, real imports of the CIS continued to expand, 
exceeding world trade growth for the fourth consecutive year. The region’s real exports are estimated to have also expanded faster than glob al trade, although somewhat less rapidly than in 
the preceding year. 
 North America’s export recovery, which started in 2003, gained momentum in 2004. Rising by 
7.5%, the region’s exports again exceeded thei r previous peak level in 2000. Import growth 
accelerated by 10%, thereby continuing to exceed the region’s export growth. Mexico’s import growth rebounded strongly and nearly matched th e regional average while its exports recovered 
only moderately, remaining below their 2000 level. The development of Canada’s merchandise 
trade contrasted with that of the United States and Mexico as Canada’s exports expanded faster 
than imports in 2004. 
 
The pick-up in Europe’s merchandise trade played an important part in the recovery of world merchandise trade, as the region accounts for abou t 46% of global trade (exports and imports of 
merchandise and commercial services combined). Europe nevertheless recorded the lowest real 
merchandise import growth rate among all regions,  a reflection of weak demand growth. Exports 
expanded faster than regional imports, but much less than global trade (see Chart 4 on page 8). 
 PRESS/401 
Page 8 of 17 
 
 The trade performance of individual European co untries showed considerable variation, but a 
broad pattern can be discerned for European trade developments in 2004. Countries at the eastern 
border of the region reported the highest expo rt and import growth, even exceeding the world 
average. The countries situated at the centre of  the region recorded trade growth exceeding the 
regional average (exports and imports combined), while those situated at the western border of 
Europe experienced trade growth below the regional average.  
Chart 4 Real merchandise trade growth by region, 2004 
(Annual percentage change) 
 
Source : WTO 
 
The first group of countries comprises new EU member states such as the Baltic states, Poland, the Czech Republic, the Slovak Republic, Hungary and Slovenia, as well as the EU candidates, Romania 
and Bulgaria. The second group includes Germany, Sweden, the Benelux countries and Austria, 
which all reported more dynamic export than im port growth in 2004. In the third group of 
countries, real merchandise export growth was weak (about 3% in France, Ireland and Spain), 
stagnated (United Kingdom) or declined (Portugal) . And although real merchandise import growth 
in this third group was stronger than for their exports, it remained below European average trade growth in 2004. Domestic demand growth was weaker in the second group than in the third, which 
contributed to the relatively dynamic performance of exports in the central European group, and 
the relatively stronger performance of imports in the west European group.   
But why did total trade (both exports and imports) expand more rapidly in the second than in the 
third group? And what could explain high trade grow th in the eastern part of Europe? It seems that 
several factors played a role in this outcome. First, the enlargement process to the east of the 
European Union is fostering an integration process above all between the eastern and central part 
of Europe, resulting in a sharp rise in intra-indu stry exchanges (e.g. automobiles). Second, at the 
date of joining, some remaining barriers to merchandise trade between the old and new members 
were removed (e.g. in particular in the agricultural  sector), leading to an additional boost to trade 
flows in 2004. Third, the trade of southeast Europe  has benefited from lower trade barriers within 
the region in recent years, thanks to the Stability Pact for South East Europe, with its extensive 
network of 28 bilateral free trade agreements. In some cases, the EU enlargement also provided 
improved access to the markets of the new EU member states for countries in southeast Europe. 20 CIS 
Europe  North America  Africa & Middle East  South and Central 
America  Asia 
0 2 4 6 8 10 12 14 16 18 Imports  
Exports  World 
exports  PRESS/401 
Page 9 of 17 
 
 
Fourth, eastern and central European countries benefited from vigorous import demand in the CIS, 
perhaps more so than western European countries, given historical trade ties.13 
Nominal merchandise and commercial se rvices trade developments in 2004 
In 2004, the value of world merchandise trade rose  by 21%, to $8.88 trillion, and that of world 
commercial services trade by 16%, to $2.10 trillion.14 For both merchandise and commercial 
services trade this represented an acceleration of growth for the third year in a row, and the strongest rise since 2000. A particular feature of nominal trade growth in 2004 was the fact that 
one major merchandise product — fuels — and one major services category — transportation — 
recorded an exceptionally strong performance in 2004. These two sectors have lagged well behind overall trade growth during the last two decades. In both cases, relatively strong prices 
contributed significantly to this outcome (see Table 2 below). The rebound in international tourism, 
particularly pronounced in Asia, led to a marked increase in global travel receipts.
15 
 
Table 2 World exports of merchandis e and commercial services, 2001–04 
(Billion dollars and percentage) 
 
  Value   Annual percentage change 
  2004   2001 2002 2003 2004 
Merchandise 8 880  –4 5 17 21 
Commercial services 2 100  0 7 13 16 
Source : WTO 
 
Price developments largely explain the differences in merchandise trade developments by region in 2004. Primary products and fuels are prominent in the merchandise export structure of Africa, the 
Commonwealth of Independent States (CIS), the Middle East and South America. The strength of 
global demand for fuels and metals, combined with substantial price increases, boosted the merchandise exports of these regions, with annual growth ranging from 26% (Middle East) to 35% 
(CIS). Despite this exceptionally strong increase, the combined share of these four regions in 
world merchandise trade amounted only to 13% in 2004. All four regions are net exporters of fuels, which contributed to the fact that their merchandise exports expanded faster than their 
merchandise imports and that their merchandise trade surplus widened further in 2004. 
 However, the strength in export earnings also stimulated import growth, which in each region is 
estimated to have grown faster than world merchandise trade. Asia, Europe and North America are 
all net importers of fuels and recorded an excess of  import growth over export growth in dollar 
terms in 2004. Merchandise exports of the Asian region expanded by 25% and thereby slightly less 
than imports, but still faster than global trade and faster than in the preceding year. Merchandise 
exports of Europe and North America were the least dynamic of all regions, expanding in dollar terms by 19% and 14% respectively. North America’s merchandise exports and imports rose 
faster than in the preceding year. No acceleration  in the nominal trade growth could be observed 
for Europe’s exports and imports in 2004, which expanded slightly less than the global average (see Table 3 on page 10). 
                                              
 
13  United Nations, Economic Commission for Eu rope, Economic Survey of Europe, 2005 No 1, 
Chapter 6: Foreign Trade and Payments in the EU-10,  South-East Europe and the CIS. In particular 
Box 62.2 Towards a free trade area in South-East Europe. 
14  Commercial services trade as me asured by balance of payments statistics which cover mainly mode 1 
and mode 2 as defined by GATS. For a more comp lete picture of services trade, the supply of 
services through mode 3 and mode 4 should be considered. 
15  The World Tourism Organization reports that inte rnational tourist arrivals reached a new record of 
760 million, an increase of 10% over 2003. World Tourism Organization, Press Release, 2 February 
2005 PRESS/401 
Page 10 of 17 
 
  
As already noted, European trade flows measured in dollar terms were strongly affected by the 
rapid appreciation of European currencies. Meas ured by a trade-weighted basket of European 
currencies the dollar depreciated on average by 9% in 2004 and by 14% in 2003. Consequently, 
the “inflationary” impact of the exchange rate developments on Europe’s dollar trade values was 
less pronounced in 2004 than in 2003. Measured in euro terms, Europe’s merchandise and commercial services exports rose by 8.2% and 5.4% respectively in 2004, a markedly better 
performance than the small decrease reported in 2003 (see Chart 5 on page 11). A detailed 
breakdown of merchandise trade by region is provided in Appendix Table 1 (on page 13).  
Table 3 World merchandise trade by major region, 2001-04 
(Billion dollars and percentage) 
 
  Exports   Imports 
 Value  Annual percentage change  Value   Annual percentage change 
  2004   2001 2002 2003 2004   2004   2001 2002 2003 2004 
World 8 880   –4  5  17  21   9 215   –4  4  16  21  
North America 1 330   –6  –4  5  14   2 010   –6  2  7  16  
United States 819   –6  –5  4  13   1 526   –6  2  8  17  
South and 
Central 
America  a 272   –3  0  13  28   238   –1  –13  5  27  
Europe 4 024   1  7  19  19   4 133   –2  5  20  20  
European Union 
(25) 3 708   1  7  19  19   3 784   –1  5  20  19  
CIS 263   0  5  27  35   171   16  9  27  31  
Africa 228   –6  3  23  30   207   4  1  22  25  
Middle East 379   –11  5  21  26   243   6  4  13  23  
Asia 2 385   –9  8  18  25   2 214   –7  6  19  27  
China 593   7  22  35  35   561   8  21  40  36  
Japan 565   –16  3  13  20   455   –8  –3  14  19  
a Includes the Caribbean 
Source : WTO 
 
On a country level, one notices that a large number of countries which export primarily fuels and other mining products recorded export increases between one third and about one half — for 
example, Chile (52%), Kazakhstan (54%), Nigeri a (57%) — while only a few countries recorded a 
decline in their merchandise exports. The latter outcome is attributable either to political instability (e.g. Côte d’Ivoire) or natural disasters (e .g. hurricane-affected Caribbean economies).  
 
Among the 30 leading merchandise exporters, China replaced Japan as the third largest exporter. The Russian Federation moved ahead of Chinese Taipei and Singapore, and became the world’s 
fourteenth largest exporter. China and the Russian  Federation both expanded their exports by 
more than one third in 2004. Poland, a new entrant to  this list, recorded the highest export growth 
among the top 30 merchandise exporters. Exports of the Republic of Korea increased by 31%, 
making the country the twelfth largest exporter in the world. Among the top 30 importers in 2004, 
Turkey reported the strongest import increase an d moved up three places (see Appendix Table 3 
on page 15). 
 
Commercial services trade growth by region differed less than merchandise trade across regions in 2004. It is estimated that above global average gr owth was experienced in the CIS and Asia (for 
both exports and imports), while in North and South America commercial services trade was less 
dynamic than world trade. However, in all four regions the growth in the dollar value in 2004 exceeded that in 2003, for both exports and impo rts. In Europe, the world’s largest services 
trader, however, exports and imports of commercial services expanded less rapidly in 2004 than in PRESS/401 
Page 11 of 17 
 
 
the preceding year. A detailed breakdown of world commercial services by region is provided in 
Appendix Table 2 (on page 14). 
 
Chart 5 Europe’s merchandise and commerc ial services exports, 2002-04 
(Percentage changes) 
 
 
Information (albeit incomplete) on commercial services trade by country in 2004 points to faster growth in commercial services trade in the Asian economies than in North American or European 
economies. The services exports and imports of th e United States rose somewhat less rapidly than 
world services trade, but the United States remained the world’s largest exporter and importer of commercial services. Partly due to a revision of its Balance of Payments statistics in 2003, Japan is 
now ranked as the fifth largest exporter of commercial services, moving ahead of Italy and Spain. 
Although Japan’s commercial services imports rose faster than world services trade in 2004, Japan continued to be the fourth largest importer. The Republic of Korea gained two positions among the 
exporters and importers of commercial services in 2004. Among the major European traders, the 
United Kingdom recorded the strongest export grow th, thereby confirming its position as Europe’s 
leading services exporter. Although German serv ices exports and imports rose less rapidly than 
world commercial services trade, Germany kept its position as the world’s second largest services 
importer and the third largest exporter in 2004 (see Appendix Table 5 on page 17). 
Trade Prospects for 2005 
The world trade expansion started to lose momentum in the second half of 2004. In the second quarter, trade in goods and services in the OECD  countries expanded at an annual rate of 12%, 
but this fell to 6% in the third quarter and 4% in the fourth quarter (see Chart 6 on page 12). In 
the last six months of 2004, economic growth slowed  down markedly in Europe and Japan, while in 
the United States and a number of large develo ping economies (e.g. China and Brazil), GDP 
growth remained vigorous. At the global level, these diverging developments resulted in a 
weakening of economic activity. For 2005, the gl obal economy is projected to follow a more 
moderate growth path, and expand by about 3% to  3.5%. Growth in the euro area and Japan, is 
predicted to weaken further, partly due to the proj ected reduction of their external surplus. For the 
United States and China, projections suggest that a deceleration of investment growth will be a 
major factor in a moderate slowdown in GDP growth.   
Compared to 2004, real interest rates are expected to be higher in the developed markets and the 
impact of higher energy costs worldwide is expected to contribute to some weakness in the global economy. Changes in global gross domestic product (GDP) growth typically lead to even larger –5 –5 10 15 20 25 Commercial services  
0 5 10 15 20 
2002 2003 2004 Merchandise  
0 5 
2002 2003 2004 Euros 
Dollars PRESS/401 
Page 12 of 17 
 
 changes in global trade growth and, if expe cted weakening in the information and telecom 
equipment sectors turns out to be as pronounced as  projected, then the deceleration in trade could 
be more pronounced than in a “normal” slowdown due to the prominent share of the latter sectors in international merchandise trade. Import demand in the CIS, the Middle East, Africa and Central 
and South America is expected to remain relatively strong and attenuate somewhat the global 
trade deceleration.  
Chart 6 Real GDP and trade growth of OECD countries, 2003-04  
 
Source : OECD, Olisnet. 
 
The marked real effective appreciation of th e yen and many European currencies since 2002 is 
likely to add slack to export performance in Japan and parts of Europe in 2005. Despite the 
depreciation of the United States dollar vis-à-vis the yen, the Canadian dollar, the euro and other 
European currencies, US imports continued to expand  faster than exports up to the fourth quarter 
of 2004. However, for 2005 the accumulated strong real effective depreciation of the US dollar is 
projected to weaken import growth and streng then export growth. Summing up these diverse 
developments, world merchandise trade growth is projected to decelerate from 9% in 2004 to 6.5% in 2005. 
 Percentage change on a quarter to quarter basis  Percentage change on a year to year basis  
-5.0 -2.5 0.0 2.5 5.0 7.5 10.0 12.5  
Q1 
 Q1 
2004 -5.0 -2.5 0.0 2.5 5.0 7.5 10.0 12.5 15.0 
Q1 
2003 Q1 
2004 
GDP Exports of goods and services Imports of goods and services PRESS/401 
Page 13 of 17 
 
 
Appendix Table 1 
World merchandise trade by region and selected country, 2004 
(Billion dollars and percentage) 
 
 Exports   Imports 
 Value  Annual percentage change  Value  Annual percentage change 
  2004   1995–00 2001 2002 2003 2004   2004   1995–00 2001 2002 2003 2004 
                
World 8880 5 –4 5 17 21  9215   5  –4 4 16 21 
North America 1330 7 –6 –4 5 14  2010   11  –6 2 7 16 
United States 819  6 –6 –5 4 13  1526   10  –6 2 8 17 
Canada 322  8 –6 –3 8 18  276   8  –7 0 8 13 
Mexico 189  16 –5 1 3 14  206   19  –4 0 1 16 
South and Central 
America  a  272 5 –3 0 13 28  238   3  –1 –13 5 27 
Brazil 96  3 6 4 21 32  66   2  0 –15 2 30 
Other South and Central 
America a 175  6 –7 –1 9 26  172   4  –1 –12 6 25 
Europe 4024 2 1 7 19 19  4133   4  –2 5 20 20 
European Union (25) 3708  2 1 7 19 19  3784   4  –1 5 20 19 
Germany 915  1 4 8 22 22  717   1  –2 1 23 19 
France 451  2 –1 3 18 15  464   3  –3 0 21 16 
United Kingdom 346  4 –4 3 9 13  462   5  –3 4 13 18 
Italy 346  1 2 4 18 16  349   3  –1 5 20 17 
Other Western Europe 204  3 0 4 14 19  165   1  –1 2 15 18 
Switzerland 118  0 1 7 15 18  111   1  1 –1 15 16 
South–East Europe 112  5 10 15 29 32  183   8  –8 20 32 36 
CIS 263 5 0 5 27 35  171   –3  16 9 27 31 
Russian Federation 183  5 –2 4 27 35  95   –6  20 12 23 28 
Africa 228 6 –6 3 23 31  207   0  4 1 22 25 
South Africa 46  1 –2 2 23 26  55   –1  –5 4 40 34 
Africa less South Africa 183  7 –7 3 23 32  152   1  6 0 16 22 
Oil exporters b 113  12 –13 1 27 41  52   0  20 –5 21 32 
Non oil exporters 69  0 2 7 18 19  100   1  1 2 14 18 
Middle East 379 12 –11 5 21 26  243   4  6 4 13 23 
Asia 2385 5 –9 8 18 25  2214   3  –7 6 19 27 
Japan 565  2 –16 3 13 20  455   2  –8 –3 14 19 
China 593  11 7 22 35 35  561   11  8 21 40 36 
Four East Asian traders c 637  5 –14 5 15 26  586   2  –16 3 13 28 
India 73  7 2 14 16 27  95   8  –2 12 26 34 
Memorandum items :               
MERCOSUR (4) 135  4 4 1 19 28  94   2  –6 –26 10 37 
ASEAN (10) 550  6 –10 5 12 20  491   1  –8 4 10 26 
EU (25) extra–trade 1203  – 1 6 17 20  1279   –  –4 1 19 20 
EU (15) 3447  2 0 6 19 18  3485   3  –2 4 20 18 
EU (new members, 10) 260  8 11 14 29 32  299   9  6 11 26 28 
Developing economies 2780  8 –7 7 18 26  2523   5  –4 4 16 27 
Developing Asia 1712  7 –7 10 20 27  1629   4  –7 9 21 30 
                                
a Includes the Caribbean. 
b Algeria, Angola, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, Sudan. 
c Chinese Taipei, Hong Kong China, Rep. of Korea, and Singapore. 
Source:  WTO.  
 PRESS/401 
Page 14 of 17 
 
 Appendix Table 2 
World trade of commercial services by region and selected country, 2004 
(Billion dollars and percentage) 
                             
  Exports   Imports 
 Value Annual percentage change  Value  Annual percentage change 
 2004  1995–00 2001 2002 2003 2004  2004  1995–00 2001 2002 2003 2004
World 2100 5 0 7 13 16 2081 4 1 5 14 16
North America 380 7 –4 2 5 11 334 9 –1 3 9 13
United States 319 7 –4 2 5 11 259 10 –1 2 8 13Canada 47 9 –3 4 5 12 56 6 –1 3 12 12Mexico 14 7 –7 –1 1 11 19 13 –1 3 4 8
South and Central 
America  
a  55 6 –2 –3 9 15 57 4 0 –12 5 14
Brazil 11 8 –3 1 9 20 16 3 2 –15 8 12
Other South and Central 
America a 44 6 –2 –4 9 13 41 4 0 –10 4 15
Europe 1114 4 3 9 19 16 1019 4 3 8 19 14
European Union (25) 1005 4 4 9 18 16 948 4 4 8 19 14
Germany 126 2 5 17 18 9 191 1 4 4 18 11United Kingdom 169 9 –1 11 13 16 135 9 0 9 13 13
France 108 –1 2 5 15 10 95 –1 3 11 22 13
Italy 85 –2 2 4 18 21 80 0 3 9 20 9
Other Western Europe 64 3 –3 9 15 15 46 2 5 8 15 15
S w i t z e r l a n d  3 7 2 – 6 1 11 41 2  2 1  1 6 51 2 8
South–East Europe 44 8 –11 1 35 21 24 9 –12 8 26 30
CIS 3 2 2 1 3 2 01 62 2  4 9  0 2 4 1 61 52 7
Russian Federation 20 –2 17 20 18 25 34 –4 23 15 16 27
Africa 4 7 3 1 42 12 2  5 4  2 2 51 31 9
South Africa 8 2 –7 1 40 24 9 0 –9 2 40 24
Middle East 36 10 –5 –2 11 18 66 5 –2 1 22 17
Asia 436 3 –1 8 9 21 501 2 –2 4 8 22
Japan 94 1 –6 2 8 23 134 –1 –7 0 3 21China 59 10 9 20 18 ... 70 8 9 18 19 ...Four East Asian traders 
b 156 3 –1 5 7 20 145 4 –1 6 4 22
India 32 21 19 12 20 ... 38 14 16 –2 25 ...
Memorandum items:   
MERCOSUR (4) 18 6 –5 –11 14 21 24 4 –2 –25 10 15ASEAN (10) 87 –1 –1 7 –2 21 108 2 –1 4 4 18
     
                           
a Includes the Caribbean. 
b Chinese Taipei, Hong Kong China,  Rep. of Korea and Singapore. 
Source:  WTO.  
 
 PRESS/401 
Page 15 of 17 
 
 
Appendix table 3 
Leading exporters and importers in world merchandise trade, 2004 
(Billion dollars and percentage) 
             
          Annual             Annual 
     %       % 
Rank  Exporters Value Share change  Rank  Importers Value Share change 
                          
1  Germany 914.8 10.0 22  1  United States 1526.4 16.1 17 
2  United States 819.0 9.0 13  2  Germany 717.5 7.6 19 
3  China 593.4 6.5 35  3  China 561.4 5.9 36 
4  Japan 565.5 6.2 20  4  France 464.1 4.9 16 
5  France 451.0 4.9 15  5  United Kingdom 462.0 4.9 18 
6  Netherlands 358.8 3.9 21  6  Japan 454.5 4.8 19 
7  Italy 346.1 3.8 16  7  Italy 349.0 3.7 17 
8  United Kingdom 345.6 3.8 13  8  Netherlands 319.9 3.4 21 
9  Canada 322.0 3.5 18  9  Belgium 287.2 3.0 22 
10  Belgium 308.9 3.4 21  10  Canada 275.8 2.9 13 
             
11  Hong Kong, China 265.7 2.9 16  11  Hong Kong, China 273.0 2.9 17 
   domestic exports  22.6 0.2 15     retained imports a 29.9 0.3 24 
   re-exports 243.1 2.7 16  12  Spain 249.8 2.6 20 
12  Korea, Republic of 253.9 2.8 31  13  Korea, Republic of 224.4 2.4 26 
13  Mexico 188.6 2.1 14  14  Mexico 206.4 2.2 16 
14  Russian Federation 183.2 2.0 35  15  Taipei, Chinese 167.9 1.8 32 
15  Taipei, Chinese 181.4 2.0 21  16  Singapore 163.8 1.7 28 
16  Singapore 179.5 2.0 25     retained imports a 82.8 0.9 30 
   domestic exports  98.5 1.1 23  17  Austria 115.1 1.2 16 
   re-exports 81.0 0.9 26  18  Switzerland 111.5 1.2 16 
17  Spain 179.0 2.0 15  19  Australia 107.8 1.1 21 
18  Malaysia 126.5 1.4 21  20  Malaysia 105.2 1.1 26 
19  Sweden 121.0 1.3 19        
20  Saudi Arabia 119.6 1.3 28        
             
21  Switzerland 118.4 1.3 18  21  Sweden 97.6 1.0 17 
22  Austria 115.7 1.3 19  22  Turkey 97.2 1.0 40 
23  Ireland 104.1 1.1 12  23  Thailand 95.4 1.0 26 
24  Thailand 97.7 1.1 22  24  India 95.2 1.0 34 
25  Brazil 96.5 1.1 32  25  Russian Federation b 94.8 1.0 28 
26  Australia 86.6 0.9 21  26  Poland 87.8 0.9 29 
27  Norway 82.0 0.9 22  27  Czech Republic b 67.9 0.7 31 
28  United Arab Emirates 79.5 0.9 21  28  Denmark 67.2 0.7 17 
29  Denmark 75.6 0.8 14  29  Brazil 65.9 0.7 30 
30  Poland 74.1 0.8 38  30  Ireland 60.1 0.6 12 
             
             
  Total of above  c 7753.5 85.0 -    Total of above  c 7971.8 84.3 – 
    World  c 9123.5 100.0 21       World  c 9458.3 100.0 21 
a Retained imports are defined as imports less re-exports.  
b Imports are valued f.o.b. 
c Includes significant re-expor ts or imports for re-export. 
 
  PRESS/401 
Page 16 of 17 
 
 Appendix Table 4 
Leading exporters and importers in world me rchandise trade (excluding intra-EU (25) 
trade), 2004 
(Billion dollars and percentage) 
 
 
          Annual             Annual 
     %       % 
Rank  Exporters Value Share change  Rank  Importers Value Share change 
                          
1  Extra-EU(25) exports 1202.8 18.2 20  1  United States 1526.4 22.0 17 
2  United States 819.0 12.4 13  2  Extra-EU(25) imports 1279.5 18.4 20 
3  China 593.4 9.0 35  3  China 561.4 8.1 36 
4  Japan 565.5 8.5 20  4  Japan 454.5 6.5 19 
5  Canada 322.0 4.9 18  5  Canada 275.8 4.0 13 
6  Hong Kong, China 265.7 4.0 16  6  Hong Kong, China 273.0 3.9 17 
   domestic exports  22.6 0.3 15     retained imports a 29.9 0.4 24 
   re-exports 243.1 3.7 16  7  Korea, Republic of 224.4 3.2 26 
7  Korea, Republic of 253.9 3.8 31  8  Mexico 206.4 3.0 16 
8  Mexico 188.6 2.8 14  9  Taipei, Chinese 167.9 2.4 32 
9  Russian Federation 183.2 2.8 35  10  Singapore 163.8 2.4 28 
10  Taipei, Chinese 181.4 2.7 21     retained imports a 82.8 1.2 30 
             
11  Singapore 179.5 2.7 25  11  Switzerland 111.5 1.6 16 
   domestic exports  98.5 1.5 23  12  Australia 107.8 1.5 21 
   re-exports 81.0 1.2 26  13  Malaysia 105.2 1.5 26 
12  Malaysia 126.5 1.9 21  14  Turkey 97.2 1.4 40 
13  Saudi Arabia 119.6 1.8 28  15  Thailand 95.4 1.4 26 
14  Switzerland 118.4 1.8 18  16  India 95.2 1.4 34 
15  Thailand 97.7 1.5 22  17  Russian Federation b 94.8 1.4 28 
16  Brazil 96.5 1.5 32  18  Brazil 65.9 0.9 30 
17  Australia 86.6 1.3 21  19  South Africa 55.2 0.8 34 
18  Norway 82.0 1.2 22  20  Norway 48.2 0.7 22 
19  United Arab Emirates 79.5 1.2 21        
20  India 72.5 1.1 27        
             
21  Indonesia 69.7 1.1 14  21  United Arab Emirates 47.4 0.7 20 
22  Turkey 62.8 0.9 33  22  Indonesia 46.2 0.7 42 
23  South Africa 45.9 0.7 26  23  Israel 43.4 0.6 20 
24  Iran, Islamic Rep. of 42.5 0.6 26  24  Saudi Arabia 43.0 0.6 16 
25  Philippines 39.6 0.6 7  25  Philippines 42.6 0.6 8 
26  Israel 36.9 0.6 17  26  Iran, Islamic Rep. of 32.7 0.5 25 
27  Argentina 34.3 0.5 16  27  Romania 32.7 0.5 36 
28  Ukraine 32.7 0.5 42  28  Viet Nam 31.0 0.4 23 
29  Chile 32.0 0.5 52  29  Ukraine 29.0 0.4 26 
30  Algeria 31.7 0.5 29  30  Chile 24.8 0.4 28 
             
             
  Total of above  c 6062.2 91.6 –    Total of above  c 6382.2 91.8 – 
    World  c 6618.7 100.0 22       World  c 6953.5 100.0 22 
a Retained imports are defined as imports less re-exports.  
b Imports are valued f.o.b. 
c Includes significant re-exports or imports for re-export. 
 
 PRESS/401 
Page 17 of 17 
 
 
Appendix Table 5 
Leading exporters and importers in world trade in commercial services, 2004 
(Billion dollars and percentage) 
 
          Annual             Annual 
     %       % 
Rank  Exporters Value Share change  Rank  Importers Value Share change 
1  United States  319.3 15.2 11  1  United States  259.0 12.4 13 
2  United Kingdom  169.2 8.1 16  2  Germany  190.8 9.2 11 
3  Germany  126.1 6.0 9  3  United Kingdom  134.7 6.5 13 
4  France  108.4 5.2 10  4  Japan  133.6 6.4 21 
5  Japan  93.8 4.5 23  5  France  94.5 4.5 13 
6  Italy  84.6 4.0 21  6  Italy  79.6 3.8 9 
7  Spain  84.2 4.0 10  7  Netherlands  72.4 3.5 11 
8  Netherlands  72.4 3.4 15  8  China  69.7 3.3 ... 
9  China  58.9 2.8 ...  9  Ireland  58.2 2.8 11 
10  Hong Kong, China  54.0 2.6 20  10  Canada  55.9 2.7 12 
11  Belgium  49.5 2.4 15  11  Spain  53.3 2.6 17 
12  Austria  47.2 2.2 12  12  Korea, Republic of  49.6 2.4 24 
13  Canada  46.9 2.2 12  13  Belgium  48.4 2.3 15 
14  Ireland  46.2 2.2 22  14  Austria  48.0 2.3 16 
15  Korea, Republic of  39.7 1.9 26  15  India  37.9 1.8 ... 
16  Sweden  37.8 1.8 25  16  Singapore  36.2 1.7 23 
17  Denmark  37.5 1.8 18  17  Denmark  34.3 1.6 21 
18  Switzerland  37.1 1.8 12  18  Russian Federation 33.5 1.6 27 
19  Singapore  36.6 1.7 19  19  Sweden  33.2 1.6 16 
20  Luxembourg  33.4 1.6 35  20  Taipei, Chinese  29.9 1.4 20 
21  Greece  33.2 1.6 37  21  Hong Kong, China  29.3 1.4 16 
22  India a  32.2 1.5 ...  22  Australia  25.5 1.2 21 
23  Norway  25.5 1.2 19  23  Norway  23.9 1.1 21 
24  Taipei, Chinese  25.4 1.2 11  24  Luxembourg  22.7 1.1 38 
25  Australia  24.6 1.2 19  25  Thailand  22.0 1.1 22 
26  Turkey  23.4 1.1 23  26  Switzerland  20.7 1.0 8 
27  Russian Federation 19.9 0.9 25  27  Indonesia a  19.9 1.0 ... 
28  Thailand  18.1 0.9 15  28  Malaysia  19.2 0.9 11 
29  Malaysia  18.0 0.9 34  29  Mexico  19.1 0.9 8 
30  Israel  14.4 0.7 18  30  Brazil  16.3 0.8 12 
  Total of above  1 815.0 86.5 –    Total of above  1 770.0 85.1 – 
    World  2 100.0 100.0 16    World  2 080.0 100.0 16 
a Secretariat estimate. 
 
Note:  Figures for a number of countries and territories have been estimated by the Secretariat. Annual 
percentage changes and rankings are affected by cont inuity breaks in the series for a large number of 
economies, and by limitations in cross-country comparability.  
END