March 26, 2010
Rebound in World Trade Is Seen
By SEWELL CHAN
Led by economic growth in China and India, world trade is projected to expand by 9.5 percent this year after shrinking by 12.2 percent last year in the sharpest contraction since World War II, the World Trade Organization said on Friday.
“We see the light at the end of the tunnel, and trade promises to be an important part of the recovery,” the organization’s director-general, Pascal Lamy, said. “But we must avoid derailing any economic revival through protectionism.”
Export declines last year were even greater in the United States (13.9 percent), the European Union (14.8 percent) and Japan (24.9 percent) than in the rest of the world. Shipments from China fell 10.5 percent.
The W.T.O. confirmed that China overtook Germany as the world’s top exporter of merchandise in 2009, accounting for almost 10 percent of global exports. China is second on the import side, with an 8 percent share of world imports compared to 13 percent for the United States.
The exports from developed countries are expected to rise by 7.5 percent this year, outpaced by an 11 percent increase projected for the rest of the world.
The W.T.O., which is trying to catalyze political support for the long-stalled Doha round of global trade negotiations, said its members had avoided imposing trade barriers in response to the crisis, but expressed concern that persistent unemployment “may intensify protectionist pressures.”
President Obama has established a National Export Initiative with the goal of doubling American exports over five years, a goal that economists have described as a tall order.
The United States is grappling with a severe trade imbalance with China. In Brussels on Friday, the United States trade representative, Ron Kirk, said that credit card companies like MasterCard, Visa, American Express, Discover Financial Services and the First Data Corporation had talked with his office about filing a complaint against China for blocking their access to its payment-processing market.
Also on Friday, Representative Kevin Brady of Texas, the top Republican on the trade subcommittee of the House Ways and Means Committee, urged the administration to review the effects of tariffs imposed last September on tire imports from China. The tariffs, a victory for the United Steelworkers, one of the nation’s largest manufacturing unions, were intended as a response to the loss of American jobs in the tire industry.
The Treasury Department is to deliver its semiannual foreign exchange report to Congress on April 15, and lawmakers have pressed the administration to find China to be a currency manipulator. Many economists agree that China has held down the value of its currency, the renminbi, to support its export-oriented economy. But officials have expressed concern that a manipulation finding, which could lead to retaliatory steps by the United States, could worsen relations with China, the nation’s second-largest trading partner.
Last year’s decline in trade was higher than the 10 percent drop the W.T.O. had projected last July, and was far larger than recent declines of 0.2 percent in 2001, 2 percent in 1982 and 7 percent in 1975. “Exports and imports of all countries fell at the same time, leaving no region untouched,” the W.T.O. said.
As measured in dollars rather than volume, the drop was even greater, 23 percent, to $12.15 trillion, mostly because of falling prices in oil and other primary commodities.
But economists also say they believe that the measured decline in exports might have been inflated by the spread of global supply chains, in which goods cross national borders several times during the production process, getting counted as exports more than once, before arriving at their final destination.
The decline in shipments was fueled by lower demand for consumer durables like automobiles and investment goods like industrial machinery, the W.T.O. said.