PRESS
RELEASE
EMBARGO: NOT FOR PUBLICATION
BEFORE 0001 HOURS GMT 24MARCH 1998
PRESS/98
19March 1998
WORLD TRADE GROWTH ACCELERATED IN1997, DESPITE
TURMOIL INSOME ASIAN FINANCIAL MARKETS
Thevolume ofworld merchandise exports grew by9.5percentin1997, thesecond highest
raterecorded inmorethantwodecades. World output grewat3percent,matching thebestperformance
since 1989. Trade andoutput growth lastyearweremore evenly spread among regions thanin1996.
Trade prospects for1998remain clouded byuncertainty overtheimpact oftheAsian financial crisis.
Butevenifmerchandise trade growth weretobereduced byasmuch as25percentofthe1997 rate,
global trade expansion in1998 would stillbeabove theaverage raterecorded forthefirsthalfofthe
1990s. These areamong thefindings oftheWTO Secretariat 'sfirstreport ontrade developments
lastyearandtheoutlook forthisyear(reproduced below). Other highlights include thefollowing:
* Trade growth inNorth America andSouth America hasbeenstrong: Much ofthehigher
thanexpected trade growth in1997 isattributable tothedynamism ofeconomies inNorth
America andSouth America. Bothregions recorded ahigher share inworld trade thanthey
haveattained inmore thanadecade. Some slowdown isexpected inthese regions in1998.
* Differencesinvolumeexportgrowthamongregionsnarrowedin1997:Strongerperformance
from Asia, Western Europe andthetransition economies have reduced thedispersion in
merchandise export growth ratesamong regions.
* Exports ofmerchandise andcommercial services exceeded US$6.5 trillion: Invalue terms
merchandise exports amounted toUS$5.3 trillion andcommercial services toUS$1.3 trillion
in1997.
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* Thestrength ofthedollar ledtolarge measurement differences inthedollar value and
thevolume ofworld trade flows in1997: Thestrength oftheUSdollar vis-à-vis thecurrencies
ofmany major traders, together withlowinflation, ledtothestrongest annual decrease indollar
prices forworld merchandise exports since 1950. Declining dollar prices ledtoonlymodest
increases inthevalue ofworld trade despite strong volume growth.
* Manufactures wereagain themostdynamic product category: Trade inmanufactured goods
expanded atarateabove totalmerchandise tradegrowth despite amarked fallindollar prices.
* Thetrade effects oftheAsian financial crisis willbefeltmost within theAsian region:
Thebulkofthetrade ofthecountries most affected bythefinancial crisis -Rep. ofKorea,
Malaysia, Thailand, Indonesia andthePhilippines -takes place within theregion, andthisis
where anytrade effects willbemost apparent. Because theaffected countries account for
relatively small shares ofworld output andtrade, theimpact ofthecrisis ontradewillbelimited.
* Trade adjustment among thecountries most affected bytheAsian crisis haslargely been
through import contraction sofar,butexports arelikely toplayasignificant rolein
economicrecovery:Importcontractionusuallyprecedesexportexpansioninthesecircumstances.
Initial difficulties relating totheavailability andcostofcredit, aswellasthecostofimported
inputs forexport production, willhamper export expansion inthefirstinstance. Butcurrency
re-alignment andslack production capacity willfavour export expansion.
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I. Main features ofworld trade developments in1997
World GDPandtradegrewatimpressive ratesin1997, notwithstanding theeffects oftheAsian
financial crisis. RealGDP1grew at3percent,matching thebestperformance achieved since 1989.
Merchandise exports grewat9.5percent,andthisisthehighest rateoftradegrowth recorded inmore
thantwodecades, withtheexception of1994. In1994, tradeexpanded atarateof10percent(Chart 1).
Inlinewithawell-established historical trend, merchandise exports grewmuch faster thanworld output -
almost three times asfastin1997.
Trade growth wasstronger thanexpected, largely duetotheperformance ofNorth andSouth
America. Strong output growth inNorth andSouth America boosted export andimport growth rates
todouble digits. Differences inregional output growth ratesnarrowed in1997, aseconomic activity
picked upinWestern Europe andthetransition economies. These tworegions together account for
about 45percentofworld trade ingoods andservices. Despite theimprovement in1997, theirtrade
growth stillremained theweakest ofallregions.2Asia, Africa andtheMiddle Eastexperienced slower
1Global growth measured at1987 prices andmarket exchange rates. Measured inpurchasing power parity
(PPP) terms, theIMF estimated global growth at4.1percent in1997.
2Appendix Tables 1-3provide information ontheworld 'slargest traders in1997.
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average output growth in1997 thanin1996. Theslowdown intheGDP growth oftheAsian region
isattributable mainly toJapan. Developing Asia'sgrowth eased onaverage onlysightly, tosome 7per
cent,stilltwice ashighasaverage global growth. According toUnited Nations data,120outof143
economies, forwhich datawereestimated, registered positive percapita growth in1997. Thismatched
performance in1996, thebestrecorded sofarinthe1990s.3
While trade volumes werebuoyant, theappreciation oftheUSdollar vis-à-vis thecurrencies
ofmajor trading nations inWestern Europe andAsiaexerted astrong downward pressure ontrade
growth ratesmeasured indollar terms. Theweight oftheWestern European andAsian countries in
global trade, combined withlowlevels ofdomestic inflation, resulted inasharp decline indollar export
prices. Thisiswhyweobserve adeceleration ofworld tradegrowth invalue terms, butanacceleration
inrealterms.4
Thedollar value ofworld merchandise exports rose3percentin1997, which wassomewhat
lessthanthe4percentraterecorded in1996. World exports ofmanufactured goods grew above the
average rate,while those ofminerals werebelow theaverage, andthegrowth ofagricultural shipments
decreased. Thevalue ofworld exports ofcommercial services increased by2percentin1997, which
almost certainly masks more significant increases intrade volumes (Table 1).Among thethreebroad
sectors ofcommercial services, thegrowth oftransportation stagnated, travel services grew slowly,
andothercommercial services recorded anabove average rateofexport growth. Exports ofmerchandise
andcommercial services bothreached newrecord levels, atUS$5.3 trillion andUS$1.3 trillion
respectively in1997.
Thefinancial crisis insome Asian countries hadonlyamodest impact onaverage global trade
growth in1997, bothinvalue andvolume terms. Thisisnotsurprising, asthecrisis deepened only
inthefinalmonths of1997 andittakes timeforthedepreciation effects tofeedthrough ontrade
developments. Moreover, theshare inworld trade ofthefivemost affected Asian countries (Rep.
ofKorea, Malaysia, Thailand, Indonesia andthePhilippines) amounts toonly6-7percent(Appendix
Table 4).
Table 1
World exports ofmerchandise andcommercial services, 1995-97
(Billion dollars andpercentage)
Value Annual change
1995 1996 1997 1995 1996 1997
Merchandise 4915 5125 5295 20.0 4.0 3.0
Commercial services 1200 1270 1295 15.0 6.0 2.0
3United Nations Press Release, Dev/2179, 16December 1997
4Theimpact oftheexchange ratemovements onthemeasurement ofgrowth rates iswell illustrated byunit
price data. Measured indollar unitvalue terms, world merchandise trade recorded a5percentdecline in1997,
themost strongly negative annual ratesince 1950. Ifworld trade were measured inSDRs, however, thenegative
dollar ratefor1997 would turnslightly positive, andinECU terms trade grew lastyearbymore than 6percent.
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II. World trade developments byregion
Inthesixthyearofeconomic expansion, North America 'sGDP growth accelerated tonearly
4percentin1997, exceeding theexpectations ofmany forecasters. Thestrength ofoverall economic
activity wasreflected intrade flows. Measured inconstant prices, bothexports andimports recorded
double digitgrowth forthesecond timeinthe1990s (Table 2).
Table 2
Growth inthevolume ofworld merchandise trade byselected region, 1990-97
(Annual percentage change)
Exports Imports
Average
1990-95 1995 1996 1997Average
1990-95 1995 1996 1997
6.0 9.0 5.0 9.5 World 6.5 9.0 5.0 9.0
7.0 9.5 6.0 10.5 North Americaa7.5 8.0 6.0 12.5
8.0 12.0 11.0 12.5 Latin America 11.5 3.0 11.5 21.5
5.5 8.0 4.5 8.0 Western Europe 4.5 8.0 3.5 7.0
5.5 8.5 4.0 8.0 European Union (15) 4.5 7.5 2.5 6.5
4.5 17.5 7.5 11.0 Transition economies 1.5 17.0 14.5 16.0
7.5 10.0 3.5 11.5 Asia 10.5 14.0 5.0 5.5
1.5 4.0 -0.5 9.5 Japan 6.5 12.5 2.0 2.5
11.0 14.5 6.5 10.0 SixEast Asian tradersb12.0 15.5 4.5 5.5
aCanada andtheUnited States.
bChinese Taipei; Hong Kong, China; theRepublic ofKorea; Malaysia; Singapore andThailand.
Note: Separate volume dataarenotavailable forAfrica andtheMiddle East, although estimates forthese regions have been
made inorder tocalculate aworld total.
Thevalue ofmerchandise exports roseby9.5percentin1997, three times faster thanworld
trade. Intra-North American trade andexports toLatin American countries expanded atdouble digit
rates. Forthefirsttimesince 1994, North America 'simports grew faster thanexports. Thestrength
ofNorth America 'simport demand ledtoasharp riseinimports fromWestern Europe (21percent),
China (21percent)andJapan (14percent). North America 'strade performance inrecent years has
ledtoarecovery oftheregion 'sshare inworld trade. Theshare oftheUnited States exports reached
13percent,thehighest levelsince1970. Asregards imports, theshare was16.5percent,thehighest
levelsince 1987. North America 'sexports andimports ofcommercial services expanded somewhat
lessthanmerchandise trade, butstillconsiderably faster thanworld services trade.
In1997, Latin America experienced itshighest annual GDP growth rate(5.2percent) and
largest netprivate capital inflow sofarinthe1990s. These twofactors contributed totheoutstanding
trade performance oftheregion lastyear. Aquestion arises astothesustainability ofthese trends,
given thelargeincrease intheregion 'scurrent account deficit andtheappreciation oftherealeffective
exchange ratesofmost Latin American currencies.
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Latin America 'smerchandise exports roseinrealterms byabout 13percent,while merchandise
imports surged bymore than20percent. Forbothexports andimports, the1997 performance was
thestrongest sofarinthe1990s (Table 2).Asbothexport andimport prices decreased onaverage
byabout 2percent, theriseinthedollar value ofmerchandise exports andimports wasnotashigh
asthatrecorded involume terms. Amarked difference inimport growth overexport growth rates
was,however, stillapparent. Thetwolargest traders inLatin America in1997-Mexico andBrazil -
continued torecord double-digit tradegrowth (Table 3).Although thedataareincomplete, itappears
thattradeincommercial services hasalsogrown rapidly. Thisgrowth waswellabove theglobal average,
butlessdynamic thantheregion 'smerchandise trade growth.
Table 3
Growth inthevalue ofworld merchandise trade byregion, 1990-97
(Billion dollars andpercentage)
Exports (f.o.b.) Imports (c.i.f.)
Value Annual percentage change Value Annual percentage change
1997 1990-95 1995 1996 1997 1997 1990-95 1995 1996 1997
5295 7.5 20.0 4.0 3.0 World 5435 7.5 19.5 4.5 3.0
904 8.5 14.5 6.5 9.5 North America 1100 8.0 11.0 6.0 10.5
280 9.0 22.0 12.0 11.0 Latin America 319 14.5 11.5 12.5 17.5
110 14.0 31.0 21.0 14.5 Mexico 113 12.5 -10.5 25.5 22.5
170 7.0 17.5 7.5 9.0 Other Latin America 207 15.5 25.0 6.5 15.0
2269 6.0 23.0 3.5 -1.0 Western Europe 2236 5.5 22.5 2.5 -1.0
2100 6.5 23.5 3.5 -1.0 European Union (15) 2045 5.5 22.0 2.0 -1.0
179 7.0 27.0 7.5 4.0 Transition economies 192 5.0 26.0 15.5 7.5
89 7.5 26.5 5.5 6.5 Central/Eastern Europe 115 11.5 28.0 16.5 4.0
120 0.5 13.5 11.5 3.0 Africa 127 5.5 21.5 -1.0 5.0
30 3.5 10.5 2.5 6.0 South Africa 32 10.5 30.5 -1.5 5.0
163 1.5 13.5 14.0 0 Middle East 144 6.0 14.0 6.0 1.5
1380 12.0 18.0 0.5 5.5 Asia 1317 12.0 23.0 5.0 0
421 9.0 11.5 -7.5 2.0 Japan 338 7.5 22.0 4.0 -3.0
183 19.0 23.0 1.5 21.0 China 142 20.0 14.0 5.0 2.5
548 14.0 23.0 3.0 3.0 SixEastAsian tradersa581 15.0 26.0 3.5 0
aChinese Taipei; Hong Kong, China; theRepublic ofKorea; Malaysia; Singapore and Thailand.
Western Europe 'stradegrowth recovered strongly. Theexport recovery wasmostpronounced
inGermany, France, Spain, Ireland andTurkey, which recorded double digitgrowth. Thedepreciation
oftheECUvis-à-vis thedollar, together withrelatively weaker domestic demand incontinental Western
Europe thaninother regions, caused exports tocontinue toexpand faster thanimports (Table 2).
Exchange ratedevelopments werethemajor cause behind thedecrease ofthedollar value of
Western Europe 'smerchandise exports andimports in1997. Measured inECU, theregion 'sexports
andimports rosebymore than10percent. Currency changes, along withstrong domestic demand,
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explain whyonlytheUnited Kingdom recorded astrong increase inthedollar value ofitsexports and
imports among themajor West European traders (Appendix Table 1).
Exports andimports ofcommercial services stagnated indollar terms in1997. Changes in
themethodology applied indatacollection, together withdivergent exchange ratedevelopments, have
resulted inmajor shifts intheranking ofWest European traders.5TheUnited Kingdom hasreplaced
France astheworld 'ssecond largest exporter ofcommercial services andhasalsomoved ahead of
France andItalyontheimport side(Appendix Table 3).
Thelarge variations inthetrade andoutput performance ofthetransition economies in1997
reflects theuneven progress made inthereform process. Strong andsteady trade growth overthe
lastthreeyears hasbeenreported byHungary andPoland. TheRussian Federation, thelargest regional
trader, recorded astrong increase inimports, andafallinexports owing tothedecline inworld oil
prices (Appendix Table 1).
TheMiddle Eastregion, morethan70percentofwhose exports arefuels, recorded astagnation
inthedollar value ofitsexports andimports, largely duetothechanging fortunes ofoil.After rising
nearly 20percentin1996, spotcrude oilprices fellby6percentonaverage in1997. Anincrease
intheregion 'soilexport volumes partly offset thenegative price effect onexport earnings oflower
oilprices.
In1997, Africa 'sGDP andagricultural output growth slackened andnominal oilprices fell.
Export earnings roseat3percentindollar value terms, which istheworld average rate,butconsiderably
lessthantherateattained in1996. Imports expanded at5percentin1997, which wassharply higher
thanthe1996rate(Table 3).Commodity price developments varied in1997, withrisesintheprices
ofbeverages (coffee, teaandcocoa) contrasted withafallinmany foodprices. Overall, price
developments favoured many leastdeveloped African countries. Afallinwheat andriceprices has
lowered theimport billofnetfoodimporting countries, atleasttotheextent thattheyrelied onimports
through commercial channels.
Notonlydideconomic growth slacken inAsiain1997 -particularly inJapan, theregion 's
major market -butchanges inmajor exchange rates(especially theriseofthedollar vis-à-vis theYen)
caused concerns inregard tothecompetitiveness ofEastAsian developing countries. These countries,
which hadclosely linked theircurrencies totheUSdollar, werethemostdynamic traders intheworld
during thelastdecade. Exchange ratedevelopments, together withsluggish intra-Asian trade, as
measured indollar terms, added totheerosion ofconfidence offoreign investors.
Despite slowing growth inJapan andthecountries hitbythefinancial crisis, theAsian region
managed arealimport growth rateof5.5percentin1997. Exports recovered strongly incomparison
to1996andata11.5percentgrowth rate,expanded faster thanworld trade(Table 2).Indollar terms,
Asia'sexports expanded byabout 5.5percent,while imports stagnated. Japan, China andtheAsian
developing countries thatsuffered fromfinancial crises allexperienced higher export growth thanimport
growth. Within thelattergroup ofcountries, tradegrowth varied considerably in1997. ThePhilippines
recorded strong export andimport growth, while Malaysia 'stradestagnated indollar terms. Imports
ofIndonesia,theRepublicofKoreaandThailanddeclined(Table3andAppendixTable7).Commercial
service exports ofAsiaincreased somewhat faster thanglobal trade, while imports remained unchanged
from theprevious year.
5Thelargest methodological revision involved France, which hassubstantially lowered theestimates ofits
exports andimports offinancial services.
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III. Thetrade implications oftheAsian financial crisis
Anyattempt atthisjuncture toidentify thetrade effects oftheAsian financial crisis isbound
tobepartly speculative. Notenough timehaselapsed since thecrisis began lastyearforitsfulleffects
ontrade flows tohavebecome apparent. Moreover, thefuture evolution oftheeconomies ofthefive
most affected countries -Rep.ofKorea, Malaysia, Thailand, Indonesia andthePhilippines -isstill
uncertain. Forthese reasons, thediscussion below issomewhat tentative incharacter. Moreover,
itisimportant tonotethatsignificant differences inthesituation facing theindividual countries involved
tendtobeobscured byasummary treatment ofthequestion attheregional level.
Appendix Table 4contains some basic dataonthefivemostaffected countries. Thecentral
point illustrated bythistableisthatthecountries concerned account forarelatively modest share of
global economic activity. They account for3.6percentofworld GDP, around 7percentofworld
trade, 6percentofglobal foreign direct investment (FDI) inflows and4percentofFDIstocks, and
lessthan4percentofgross international banklending. Theeffects ofthecrisis maybesevere for
thecountries concerned, andcanspilloverinvarious waysintoother countries andtheworld economy
ingeneral. Butwhile theeffects ofthecrisis remain concentrated onthisgroup ofcountries, itslikely
impact must beassessed inlightoftherelative sizefactor.
Asanumber oftheAsian countries affected bythefinancial crisis seem tomove towards
recovery, aquestion thatarises ishowfarrenewed economic activity willbedriven byexports. Strong
currency depreciations should contribute torapid export growth. Observers whosubscribe tothis
scenario fearthataflood ofimports willdamage some industries andleadtolower GDP growth and
higher unemployment intheindustrialized countries. These fearswould seemtobelargely unjustified,
atleastasfarascountries outside theAsiaregion areconcerned.
Appendix Table 5andAppendix Table 6show thatnocountry outside Asiarelied onthemarkets
ofthefivemost affected countries forasmuch as10percentoftheirtotalexports, orreceived as
much as10percentofitstotalmerchandise imports from these countries. While theUnited States
imported8.6percentofitsmerchandiseimportsfromthisgroupofcountriesin1996,allWestEuropean
economies imported lessthan5percentofthetotalfromthecountries inquestion. Theshare ofthe
fivemost affected Asian countries inEUimports andexports was2.5percentin1996. Japan, by
contrast, received 16.5percentofitsimports from thefiveAsian countries. Thus, evenavery
substantial increase intheexports ofthesecountries -say,by20percent-would notcause asignificant
probleminrelationtotheoveralltradeorcurrentaccountforcountriesoutsideAsia.Particularindustries
withlarge spare capacity, ontheother hand, could expand exports rapidly, thereby putting pressure
onthose industries intheimporting countries.
Previous episodes oflargedevaluations suchastheMexico crisis, theCFA-Franc devaluation
inWestAfrica, andtheSwedish andItalian devaluations intheearlytomid-1990s featured rapid export
growth forthethree years following thedevaluations andimport contraction inthefirstyearafter
devaluation, before import growth resumed. Theconsistency ofthispattern maysuggest asimilar
scenario inthepresent case.
Several factors speak infavour ofreasonably strong export-led recovery inthecaseofthefive
mostaffected Asian economies. First, excess capacity foruseinexport production willbeavailable
asaresult ofslack domestic demand. Second, thecountries concerned haveastrong track record
assuccessful exporters. Overthelastdecade, theexport andimport growth ratesofthefivecountries
exceeded thegrowth ofworld trade byatleast50percent. Third, formany ofthese countries, the
share offoreign multinationals intotaltrade islarge, which means thatasignificant segment oftrade
ispartly sheltered from theturmoil ofthefinancial crisis.
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Ontheother hand, some observers question thescope forasubstantial riseinexports from
theaffected countries, asfinancial sector difficulties undermine tradeexpansion, atleastintheshort-run.
Theargument isthatasevere liquidity crisis, together withthesteep devaluations, hasbrought such
turmoil tothebanking sector thatfinancial intermediation essential forproduction andexternal
transactions hasbeenweakened. Banks withnoliquidity cannot provide newcredits orrollover
outstanding credits, leading totheclosure ofbusinesses insome cases. Inother cases theabsence or
thehighcosts oftrade financing undermine export prospects.
Furthermore, imports (especially inputs forexport processing) arelargely contracted indollar
terms, which means higher production costs forexports thatdepend onimports. This, together with
inflationary pressure ondomestic inputs brought about byhigher import prices andhigher interest rates
leadtoasmaller realthannominal exchange ratedepreciation. Inaddition, thefactthattheaffected
countries areimportant trading partners foroneanother further mitigates thecompetitiveness gainthat
might beexpected from thecurrency depreciations.
Thenominal depreciations vis-à-vis theUSdollar between January 1997 andJanuary 1998
ranged from40percenttomore than75percent. Taking intoaccount theinflation differentials and
exchange ratedevelopments ofthefivemostaffected Asian countries, therealeffective exchange rate
depreciation ranged from27percenttonearly 70percent. Even ifinflation accelerates intheaffected
countries inthemonths ahead, thedevaluations thathaveoccurred represent asubstantial boost inprice
competitiveness.
External factors mayalsolimitincreases intheexports ofthefivemost affected countries.
Mostnotably, North America 'sGDPgrowth willprobably slowdown in1998, implying slower growth
inimport demand. Slow import growth intherestofAsiaisalsolikely tolessen export prospects,
given thatmore than50percentoftheexports ofthemostaffected Asian countries gotoother Asian
countries.6Concernhasalsobeenexpressedregardingtheevolutionofimportsofthetwolargestmarkets
inAsia-Japan andChina. Imports ofJapan andChina werealready sluggish in1997, andthelatest
dataavailable (December 1997-January 1998) point toacontinuation ofweak import growth.
Chart 2shows themost recent information available ontheevolution ofmerchandise trade
invalue terms forthefivemostaffected countries. Asignificant pattern discernible from these data
isthatthecontraction ofimports hassofarbeenmore pronounced thanexport expansion. Assuggested
above, thisistobeexpected, andconforms totheexperience ofother countries thathavefaced large
andsudden reductions inthevalue oftheircurrencies.
Insummary, itisprobable thatexports from thefivemost affected Asian economies will
accelerate in1998, butperhaps notasrapidly asmight havebeenanticipated asaresult ofthestrong
currency depreciations thatfollowed inthewake ofthefinancial crisis.
6Theshare ofAsia intheexports ofthefiveAsian countries 'exports ranged in1996 from 45forthePhilippines
to63percent forIndonesia.
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IV. Global trade outlook for1998
Theprospects forworld trade andoutput in1998 havebeenclouded tosome degree bythe
Asian financial crisis. Projections foreconomic growth havebeenscaled down markedly inAsia.
Thefivecountries which areatthecoreofthecrisis areexpected torecord average GDP growth of
3percentorlessin1998. Asintra-Asian tradeandinvestment linkshavedeveloped dynamically over
thelastdecades -more thanonehalfofAsia'strade wasintra-regional in1996 -therepercussions
ofthecrisis areforemost within theregion. Intra-regional trade, which hasmore thantripled since
1990, could evendecrease.
TheAsian crisis willalsohavesome repercussions ontradeandoutput inother regions. Asia
became thelargest net-importing region forfuelsinthe1990s, andslower Asian growth isexpected
tokeeptrade volumes andprices foroilunder pressure. Inthefirsttwomonths of1998, oilprices
hadalready fallen 20percentbelow the1997 average. These developments willclearly affect oil-
exporting countries. Enhanced export competitiveness intheaffected countries could alsoaffect the
export prospects ofcountries whose exchange rateshavemaintained aclose value relationship with
thedollar, including some Asian, Latin American andtransition economies.
There aremore andmore signsthatdomestic demand -reflected particularly innon-residential
fixed investment -ispicking upincontinental Western Europe. Lower interest rates, together with
thelikelihoodofloweroilprices,shouldcontributetoastrengtheningofGDPgrowthinWesternEurope,
despite theAsian crisis. TheAsian financial crisis islikely toresult inreduced capital outflows, in
particular fromWestern Europe. Smaller private capital outflows, together withlower public deficits,
willtendtoreduce interest ratesfurther andencourage bothinvestment andconsumption. Thisin
turnwillstimulate import demand, andsupport bothtrade andoutput initsmajor trading partners.
Ontheother hand, USoutput growth isexpected toslowdown in1988, buttheextent oftheslowdown
ishighly uncertain. Latin America 'seconomic growth isalsoprojected toslacken from itsrecord
ratein1997, returning totheaverage ratefortheperiod 1990-95.7
Ifthefinancial crisis canbelargely contained tothefivecountries which havebeenseriously
affected, therepercussions should notresult inmore thanasmall dentinglobal economic growth.
Asworld output isexpected toslowmoderately, andasslower growth intheAmericas andAsiais
expected tobeoffset partly bystronger growth inEurope, adecrease inglobal tradeof2to3percentage
points maybeexpected. This, however, would stillleave therateofglobal trade expansion above
theraterecorded inthefirsthalfofthe1990s.
7AllGDP projections aretaken from IMF, Interim Assessment oftheWorld Economic Outlook, December
1997.
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Appendix Table 1
Leading exporters andimporters inworld merchandise trade, 1997
(Billion dollars andpercentage)
Rank EXPORTERS Value
(f.o.b.)Share Change Rank IMPORTERS Value
(c.i.f)Share Change
1United States 688.9 12.6 10 1United States 899.2 16.1 9
2Germany 511.7 9.4 -2 2Germany 441.5 7.9 -4
3Japan 421.1 7.7 2 3Japan 338.4 6.0 -3
4France 287.8 5.3 0 4United Kingdom 307.2 5.5 7
5United Kingdom 280.1 5.1 7 5France 266.8 4.8 -5
6Italy 238.9 4.4 -5 6Hong Kong, China 208.7 3.7 4
7Canada 214.4 3.9 6 retained importsa48.0 0.9 0
8Netherlands 193.5 3.5 -5 7Italy 208.6 3.7 1
9Hong Kong, China 188.1 3.4 4 8Canada 201.0 3.6 15
domestic exports 27.4 0.5 0 9Netherlands 177.1 3.2 -4
10 China 182.7 3.3 21 10 Belgium-Luxembourg 155.5 2.8 -4
11 Belgium-Luxembourg 167.6 3.1 -2 11 Korea, Rep. of 144.6 2.6 -4
12 Korea, Rep. of 136.6 2.5 5 12 China 142.4 2.5 3
13 Singapore 125.0 2.3 0 13 Singapore 132.4 2.4 1
domestic exports 72.4 1.3 -2 retained importsa79.8 1.4 0
14 Chinese Taipei 121.9 2.2 5 14 Spain 122.7 2.2 1
15 Mexico 110.4 2.0 15 15 Chinese Taipei 113.2 2.0 12
16 Spain 104.3 1.9 2 16 Mexico 112.5 2.0 23
17 Sweden 82.4 1.5 -3 17 Malaysia 78.6 1.4 0
18 Malaysia 78.7 1.4 0 18 Switzerland 75.8 1.4 -4
19 Switzerland 76.1 1.4 -6 19 Australia 65.8 1.2 1
20 Russian Fed.b65.7 1.2 -5 20 Brazil 65.7 1.2 15
21 Australia 63.2 1.2 4 21 Sweden 65.2 1.2 -2
22 Thailand 58.2 1.1 5 22 Thailand 64.5 1.2 -12
23 Austria 56.9 1.0 -2 23 Austria 63.2 1.1 -6
24 Saudi Arabia 55.2 1.0 -3 24 Russian Fed.b48.0 0.9 11
25 Indonesia 53.4 1.0 7 25 Turkey 46.8 0.8 10
26 Brazil 53.0 1.0 11 26 Poland 42.0 0.8 13
27 Ireland 52.4 1.0 8 27 Indonesia 41.7 0.7 -3
28 Denmark 48.5 0.9 -5 28 Denmark 40.6 0.7 -10
29 Norway 47.7 0.9 -4 29 India 40.6 0.7 9
30 Finland 41.0 0.8 1 30 Ireland 39.1 0.7 9
Total ofabovec4805.0 88.1 3 Total ofabovec4749.0 84.9 2
Worldc5455.0 100.0 3 Worldc5600.0 100.0 3
aRetained imports aredefined asimports lessre-exports.
bDataexclude trade withtheBaltic States andtheCIS. Including trade withthese States would liftRussian exports andimports to$86.6 billion
and$65.7 billion, respectively.
cIncludes significant re-exports orimports forre-export.
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Appendix Table 2
Leading exporters andimporters inworld merchandise trade (excluding European Union intra-trade), 1997
(Billion dollars andpercentage)
Rank EXPORTERS Value
(f.o.b.)Share Change Rank IMPORTERS Value
(c.i.f)Share Change
1European Union (15) 823.0 19.7 3 1United States 899.2 20.8 9
2United States 688.9 16.5 10 2European Union (15) 768.2 17.8 2
3Japan 421.1 10.1 2 3Japan 338.4 7.8 -3
4Canada 214.4 5.1 6 4Hong Kong, China 208.7 4.8 4
5Hong Kong, China 188.1 4.5 4 -retained importsa48.0 1.1 0
-domestic exports 27.4 0.7 0 5Canada 201.0 4.7 15
6China 182.7 4.4 21 6Korea, Rep. of 144.6 3.3 -4
7Korea, Rep. of 136.6 3.3 5 7China 142.4 3.3 3
8Singapore 125.0 3.0 0 8Singapore 132.4 3.1 1
-domestic exports 72.4 1.7 -2 retained importsa79.8 1.8 0
9Chinese Taipei 121.9 2.9 5 9Chinese Taipei 113.2 2.6 12
10 Mexico 110.4 2.6 15 10 Mexico 112.5 2.6 23
11 Malaysia 78.7 1.9 0 11 Malaysia 78.6 1.8 0
12 Switzerland 76.1 1.8 -6 12 Switzerland 75.8 1.8 -4
13 Russian Fed.b65.7 1.6 -5 13 Australia 65.8 1.5 1
14 Australia 63.2 1.5 4 14 Brazil 65.7 1.5 15
15 Thailand 58.2 1.4 5 15 Thailand 64.5 1.5 -12
16 Saudi Arabia 55.2 1.3 -3 16 Russian Fed.b48.0 1.1 11
17 Indonesia 53.4 1.3 7 17 Turkey 46.8 1.1 10
18 Brazil 53.0 1.3 11 18 Poland 42.0 1.0 13
19 Norway 47.7 1.1 -4 19 Indonesia 41.7 1.0 -3
20 India 33.9 0.8 3 20 India 40.6 0.9 9
21 South Africa 30.3 0.7 6 21 Philippines 37.3 0.9 9
22 United Arab Emirates 26.5 0.6 2 22 Norway 35.4 0.8 -1
23 Poland 26.0 0.6 6 23 South Africa 31.6 0.7 5
24 Turkey 25.4 0.6 10 24 Israel 30.6 0.7 -3
25 Argentina 25.4 0.6 7 25 Argentina 30.3 0.7 27
26 Philippines 25.2 0.6 23 26 United Arab Emirates 28.2 0.7 8
27 Venezuela 23.9 0.6 4 27 Saudi Arabia 27.3 0.6 -2
28 Czech Rep. 22.5 0.5 3 28 Czech Rep.c27.0 0.6 -3
29 Israel 22.4 0.5 9 29 Hungary 20.8 0.5 15
30 Hungary 18.7 0.4 19 30 Chile 19.6 0.5 10
Total ofaboved3844.0 92.0 5 Total ofaboved3918.0 90.7 5
Worldd4180.0 100.0 5 Worldd4320.0 100.0 5
aRetained imports aredefined asimports lessre-exports.
bDataexclude trade withtheBaltic States andtheCIS. Including trade withthese States would liftRussian exports andimports to$86.6 billion
and$65.7 billion, respectively.
cImports arevalued f.o.b.
dIncludes significant re-exports orimports forre-export.
MOREPRESS/98
Page16
Appendix Table 3
Leading exporters andimporters inworld trade incommercial services, 1997
(Billion dollars andpercentage)
Rank EXPORTERS Value Share Change Rank IMPORTERS Value Share Change
1 United States 230.7 17.8 8 1 United States 151.4 12.0 8
2 United Kingdom 84.8 6.5 9 2 Japan 122.6 9.7 -5
3 France 81.9 6.3 -1 3 Germany 116.3 9.2 -8
4 Germany 72.3 5.6 -8 4 United Kingdom 69.7 5.5 9
5 Italy 71.2 5.5 3 5 Italy 69.1 5.5 3
6 Japan 68.4 5.3 3 6 France 61.4 4.9 -6
7 Netherlands 48.5 3.7 0 7 Netherlands 43.4 3.4 -3
8 Spain 43.6 3.4 -1 8 Canada 35.7 2.8 1
9 Hong Kong, China 37.4 2.9 0 9 Korea, Repof 33.4 2.6 5
10 Belgium-Luxembourg 33.3 2.6 -4 10 Belgium-Luxembourg 32.2 2.5 -3
11 Austria 30.6 2.4 -13 11 Austria 26.4 2.1 -14
12 Singapore 30.1 2.3 1 12 Chinese Taipei 24.3 1.9 2
13 Canada 29.2 2.3 5 13 Spain 23.8 1.9 0
14 Korea, Repof 28.2 2.2 10 14 China 23.8 1.9 6
15 Switzerland 23.9 1.8 -9 15 Hong Kong, China 22.9 1.8 6
16 China 23.3 1.8 13 16 Sweden 20.1 1.6 8
17 Australia 18.9 1.5 5 17 Australia 19.0 1.5 5
18 Sweden 17.4 1.3 4 18 Singapore 18.9 1.5 1
19 Chinese Taipei 16.6 1.3 3 19 Russian Fed. 18.3 1.4 -2
20 Denmark 16.3 1.3 -1 20 Thailand 17.4 1.4 -10
Note: Secretariat estimates based onincomplete orpreliminary data.
MOREPRESS/98
Page17
Appendix Table 4
Share ofAsiaandselected Asian countries intheworld economy in1996
Asia Japan China Asia (5)a
A.World population 56.0 2.2 21.3 6.9
B.World GDP
-atcurrent prices andexch.rates
-atPPP28.9
34.115.5
8.02.4
11.13.6
(6.0)
C.World merchandise trade
-exports
-imports25.6
25.08.0
6.63.0
2.66.4
7.0
D.World commercial services
-exports
-imports22.7
27.95.3
10.21.7
2.16.0
7.3
E.World foreign direct investment
-inflows
-outflows
-inward stocks
-outward stocks26.1
21.2
20.2
19.30.1
6.9
0.6
10.412.1
0.6
5.2
0.65.8
2.3
4.4
1.0
F.Intern. bank lending (June 97)b
-gross
-net...
......
...1.0
0.23.8
2.8
G.Market capitalizationc
-Domestic companies 25.8 15.9 ... 3.6
aIndonesia, Republic ofKorea, Malaysia, Philippines andThailand.
b"Gross lending": assets ofBISreporting banks toallsectors incountry/country group asapercentage of
totalinternational bank lending (outstanding assets). "Net": "assets" less"liabilities" asashare oftotal(gross)
lending.
cValuation attheendof1996. World total excludes some emerging stock markets (China andIndia).
Including these emerging stock markets, China 'smarket capitalization accounted for3.7percentoftheworld
totalattheendof1995 (International Federation ofStock Exchanges, FIBV).
Sources: BIS,FIBV, IMF, UNCTAD, World Bank andWTO.
MOREPRESS/98
Page18
Appendix Table 5
Merchandise traders withahighshare ofexports toAsiain1996
(Percentage shares)
Destination Asia
______________________________________________________________
Total Japan
Australia
New ZealandOther Asia
________________________________________
Reporter Total China Other
developing
AsiaAsia (5)a
Singaporeb,c62.9 10.5 52.4 2.7 49.7 30.2
Australia 71.4 27.6 43.8 5.0 38.7 20.1
Japan 46.4 2.2 44.2 5.3 38.9 19.6
Indonesia 63.0 28.5 34.6 4.1 30.4 11.8
Saudi Arabiad52.0 17.0 35.0 0.3 34.7 11.8
Brunei Darussalamd96.1 72.3 23.8 0.0 23.8 11.6
New Zealand 61.8 35.8 25.9 2.6 23.4 11.1
Chinese Taipei 54.5 13.6 40.9 0.5 40.3 10.6
Malaysia 62.1 15.3 46.9 2.4 44.5 9.9
Philippines 44.5 18.8 25.8 1.6 24.2 9.6
Korea, Rep. of 52.1 13.7 38.4 8.8 29.6 9.3
Chile 34.5 17.1 17.5 2.4 15.0 8.6
United States 32.3 13.0 19.3 1.9 17.3 8.4
China 59.4 21.7 37.7 0.0 37.7 8.3
Thailand 55.8 18.5 37.3 3.4 34.0 8.3
Indiae31.5 8.3 23.2 1.0 22.2 6.7
Ecuador 12.0 3.2 8.8 1.4 7.4 6.5
Pakistan 31.6 8.3 23.3 1.3 22.0 6.4
Peru 23.8 7.0 16.8 7.2 9.6 5.4
Hong Kong, Chinab55.4 8.1 47.4 34.3 13.1 5.3
domestic exports 51.4 6.5 45.0 29.0 15.9 5.6
South Africa 25.4 10.7 14.7 1.0 13.7 4.8
Israel 21.0 7.1 13.9 0.4 13.5 4.7
Mongolia 22.1 0.5 21.6 17.9 3.7 2.2
Mozambique 22.2 7.6 14.5 0.0 14.5 1.5
Macau 27.0 1.7 25.4 12.6 12.8 0.6
aIndonesia; Rep. ofKorea; Malaysia; Philippines andThailand.
bIncludes significant re-exports.
cAdjusted toinclude Singapore 'sexports toIndonesia.
d1994 instead of1996.
e1995 instead of1996.
Note: Ranking according toshare ofcountry group withafinancial crisis. Retained reporters arethose with
anexport share oftotalAsia(orAsia5)inexcess of20(or5)percent. Other developing Asiaincludes
thefiveAsian countries withafinancial crisis.
Source: UNSD, Comtrade database.
MOREPRESS/98
Page19
Appendix Table 6
Merchandise traders withahighshare ofimports from Asiain1996
(Percentage shares)
Origin Asia
______________________________________________________________
Total Japan
Australia
New ZealandOther Asia
________________________________________
Reporter Total China Other
developing
AsiaAsia (5)a
Singaporeb,c58.5 19.2 39.3 3.3 36.0 27.5
Brunei Darussalamd36.6 11.0 25.6 1.8 23.8 20.7
Japan 42.6 4.8 37.8 11.6 26.2 16.5
SriLankad63.3 14.9 48.5 3.5 45.0 16.1
China 59.0 23.8 35.2 0.0 35.2 13.9
Chinese Taipei 50.5 30.0 20.5 3.0 17.5 11.8
Philippines 55.0 24.9 30.1 2.2 27.9 11.6
Malaysia 64.0 28.0 36.0 2.4 33.6 11.4
Thailand 56.9 30.5 26.3 2.7 26.3 10.8
Hong Kong, Chinab76.7 14.7 61.9 36.7 25.3 10.4
Indonesia 54.6 26.3 28.4 3.7 24.6 10.3
Pakistan 33.1 12.3 20.7 4.7 16.0 10.2
Australia 43.4 17.7 25.7 5.3 20.4 9.1
United States 39.6 15.1 24.4 6.7 17.8 8.6
Indiae24.1 9.7 14.4 2.2 12.2 6.5
Oman 33.0 19.8 13.3 0.8 12.4 6.2
Saudi Arabiad25.9 12.9 13.0 2.2 10.9 5.9
Korea, Rep. of 43.0 25.6 17.4 5.7 11.7 5.9
Kuwaite24.9 10.7 14.2 2.3 11.9 5.8
New Zealand 55.0 38.5 16.5 3.7 12.8 5.8
Mauritius 39.1 9.9 29.2 4.3 24.9 5.4
Macau 78.1 10.1 68.0 23.9 44.1 4.9
Mongolia 36.2 11.8 24.4 15.4 9.0 4.3
Paraguay 20.7 6.6 14.1 0.0 14.1 4.1
South Africa 24.2 10.9 13.3 2.1 11.2 4.1
Seychelles 21.5 3.9 17.5 0.4 17.1 3.4
aIndonesia; Rep. ofKorea; Malaysia; Philippines andThailand.
bIncludes significant imports forre-export.
cAdjusted toinclude Singapore 'simports from Indonesia.
d1994 instead of1996.
e1995 instead of1996.
Note: Ranking according toshare ofcountry group withafinancial crisis. Retained reporters arethose with
animport share oftotalAsia(orAsia5)inexcess of20(or5)percent. Other developing Asiaincludes
thefiveAsian countries withafinancial crisis.
Source: UNSD, Comtrade database.
MOREPRESS/98
Page20
Appendix Table 7
Growth inthevalue ofworld merchandise trade oftheAsian countries with afinancial crisis,
1990-97
(Billion dollars andpercentage)
Exports (f.o.b.) Imports (c.i.f.)
Value Annual percentage change Value Annual percentage change
1997 1990-95 1995 1996 1997 1997 1990-95 1995 1996 1997
352 16.1 25.8 4.9 6 Asia(5) 367 16.1 30.2 7.6 -3
137 14.0 30.3 3.7 5 Korea, Rep. of 145 14.1 32.0 11.3 -4
79 20.3 26.0 5.8 0 Malaysia 79 21.6 30.5 0.9 0
58 19.6 25.1 -1.3 5 Thailand 65 16.2 30.0 3.8 -12
54 12.1 13.4 9.7 7 Indonesia 42 13.2 27.0 5.7 -3
25 16.8 31.6 16.7 23 Philippines 37 16.8 25.7 20.4 9
MOREPRESS/98
Page21
Appendix Table 8
Realeffective exchange rates ofselected Asian economies
(Year toyearpercentage changes)
Indonesia Korea,
Rep. ofMalaysia Philippines Thailand Hong Kong,
ChinaJapan Singapore Chinese
Taipei
1997
January 4.0 0.2 7.1 6.1 5.3 6.8 -9.5 4.7 0.2
February 6.7 -0.7 8.7 8.5 5.1 8.0 -11.3 5.0 2.5
March 7.5 -3.5 9.5 10.4 4.9 9.2 -10.5 3.7 2.3
April 5.8 -3.5 7.4 3.8 4.4 8.3 -9.9 3.3 1.9
May 3.1 -5.0 5.0 0.6 2.9 7.7 -6.5 2.4 1.4
June 1.7 -3.7 3.4 -0.5 0.9 7.0 -0.3 2.3 1.2
July 0.1 -1.8 2.8 -4.3 -11.5 8.9 0.7 2.7 2.9
August -5.6 0.2 -1.4 -9.6 -11.5 9.9 -0.6 1.7 3.3
September -13.3 -1.3 -10.3 -16.7 -19.6 7.7 -1.7 0.6 2.7
October -27.0 -3.2 -18.0 -19.5 -21.4 8.1 0.1 -1.6 0.4
November -20.5 -11.3 -18.0 -20.0 -25.0 9.0 -2.4 -2.2 -0.9
December -41.1 -32.0 -24.4 -24.7 -32.7 10.0 -1.0 -3.2 -0.6
1998
January -69.1 -37.7 -27.0 -32.8 -41.9 12.3 4.9 -6.5 -6.6
February -68.8 -38.8 -25.1 -30.4 -35.3 9.2 9.5 -3.8 -5.2
Source: WTO calculations based onMorgan Guaranty Trust Company (http://www.jpmorgan.com).
END