GENEVA, Oct 10: The volume of world goods trade is projected to grow by one per cent in 2002 after last year saw its first decline since 1982, the World Trade Organization (WTO) said on Thursday.

Confirming its April forecast, the WTO warned in its latest report, however, that the increase would depend on continued momentum in the recovery in some industrialized countries and developing Asia.

“If the overall economic recovery, such as it is, continues for the last two quarters of this year we might be looking at trade expansion in volume terms of something in the region of one per cent,” Patrick Low, director of the WTO’s development and economic research division, told a news conference.

WTO chief Supachai Panitchpkdi said the “disappointing” trade figures for 2001 and the first half of 2002 underscored the importance of making progress in trade liberalization talks.

“While the depressed levels for imports and exports reflect macroeconomic factors, it is evident that policy measures must be taken to bolster confidence,” the director-general said in a written statement.

This would “provide the underlying assurances necessary to foster higher levels of growth,” he added.

Supachai said one way would be for political leaders to send a “strong signal” to consumers, markets and producers that they plan to move ahead with further trade liberalization through the WTO talks launched in November 2001 in Doha, Qatar.

In its report ‘World Trade Developments in 2001 and Prospects for 2002’, the global trade body said growth in demand in North America was expected to be stronger in the second half of this year.

However, Western Europe and Japan were likely to see continued sluggish growth, it warned.

“Oil prices in the third quarter were higher than expected at the beginning of the year, and a further increase would adversely affect the already fragile global recovery,” it said.

But the value of world exports in goods is expected to grow “somewhat faster” than the volume, at around two percent. Dollar prices are forecast to increase markedly in the second half compared to the same period in 2001.

World trade decreased by 1.5 per cent in 2001 — the first time growth was negative since 1982 — after growing by 11 per cent a year earlier.

World trade started to recover from the first quarter of this year, WTO experts said.

The recovery in output was “vigorous” in the US and major developing exporters of information technology products in East Asia.

Western Europe and Japan saw a “rather timid” recovery, while in Latin America the Argentine crisis was felt in neighbouring countries and contributed to a stagnation in output.

Despite the upturn, the dollar value of world goods trade in the first half of 2002 was still about four percent lower than in the same period in 2001.

“Price and volume changes contributed equally to this decrease,” the report said.

EU, US, Japanese and Latin American imports fell in dollar terms.

For developing Asia, trade recovered strongly in the first half of 2002 and was especially buoyant in China, which joined the WTO last December.

China’s exports rose by 17.5 per cent in the first eight months of this year, while imports grew by 14.5 per cent in value terms, the experts said.

“WTO accession in the short run has actually stimulated trade,” Michael Finger, of the WTO development and economic research division, told reporters.

Developing countries’ participation in world trade amounted to 29 per cent last year, though it had reached about 30 per cent in the late 1990s, compared to about 23 per cent in 1990, they added.—AFP