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. Last Updated: 07/27/2016

WTO: Global Trade to Grow 7.5% in '04

GENEVA -- Global trade should expand by a robust 7.5 percent in 2004, providing the world economy does not falter, after registering stronger than expected growth of 4.5 percent last year, the World Trade Organization said Monday.

The results for last year -- measured in volume of trade -- were boosted by higher-than-expected demand in the United States, Asia and the former Soviet bloc, the WTO said. Asian countries recorded import and export growth of 10 percent to 12 percent.

The Geneva-based trade body had been forecasting growth in merchandise trade of only around 3 percent last year, little changed on 2002's 2.5 percent, after the SARS epidemic amongst other factors led to a sluggish start to the year.

"Clearly, the improved economic situation in the United States and Asia has given an important boost to world trade," WTO Director-General Supachai Panitchpakdi said.

China, which jumped three places to become the world's third largest importer behind the United States and Germany, saw a 35 percent rise in exports in nominal terms, which is without adjusting for price changes, and a 40 percent leap in imports, compared with the previous year, the WTO said.

The world economy was seen maintaining in the current year the momentum it had picked up over the last half of 2003, with global gross domestic product seen rising to 3.7 percent from 2.5 percent in 2003, the WTO said.

Amongst the world's 30 richest states, trade in goods and services had expanded at close to 9 percent over the last half of 2003, and "partial information" from the early part of this year indicated "the momentum of trade growth remained strong."

But amongst the threats to growth, the WTO listed the "unsustainable" size over the medium term of the U.S. trade deficit, a possible faltering in West European demand and the risk that oil prices would not fall as predicted.

"We may well have to look at a revision of our prediction in the light of what happens" to oil prices, said Patrick Low, the WTO's chief economist. "But right now there is a lot of uncertainties and other barriers to free international trade.

Nevertheless, 2003's stronger performance remained below the 5.4 percent average annual growth registered since the WTO's launch in 1995.

Last year, Asia and the transition economies of the former Soviet Union were the most dynamic traders, with merchandise trade rising between 10 and 12 percent.

Germany moved above the United States to become the world's biggest exporter, with Japan remaining third and China moving above France into fourth place.

Western Europe and Latin America put in the weakest trade performances last year, with imports growing just 2 percent in real terms.

(Reuters, AP)