The World Trade Organization said in a survey on June 11 that in the past two decades (1985-2003) remarkable changes took place in world trade structure in a way not in line with what had been expected.

WTO has observed two changes in the structure of world trade. One is that the service trade did not outgrow goods trade as aggressively as it used to. The other is that processing trade kept rising in the agri-products trade.

Rise of service trade slowed down

It had been widely held that the growth of service trade outpaced that of goods trade. It really did in the late 1980s. However, the momentum did not last long.

The global service trade actually went up by 4. 5 percent in 2003 if the exchange rates changes were taken into consideration. That was faster than the previous year but much slower than the later half of 1990s. The pace was moderate in 2003, mainly due to economic performance which was weak in the first half of the year and improved in the rest of the year.

The trade rise outclassed the output growth.

In the 1990s, the world trade, at a speed of 6.5 percent average, strode forward at a pace twice as fast as goods output. Many areas saw no more contributions of their trade volume to their GDP. These are typical indicators of economic standstill or depression.

In 2003, global nominal goods trade was up 16 percent to 73 trillion USD and the service trade was 12 percent up to 1.8 trillion USD.

Generally speaking, service trade and goods trade went through similar changes after 1990s. From 1990 to 2003, the service trade climbed up at 6 percent on average annually, the same as the goods trade. As a result, the service trade accounted for 20 percent of the total world trade and that record has kept for years. There has been no data signaling increasing significance of service trade in the gross world trade.

Although the service and goods trade left similar growth curves in the past decade, differences existed in some specific sectors which registered either more vigorous or milder expansion than the overall trade. For example, transportation, a category under service trade, moved on slower than the overall speed. And the same thing happened on minerals and agricultural products under the goods trade.

Among the goods trade, the industrial manufactured products worth most attention. Exports of these products making up 58.2 percent in the total exports in 2002 , compared with 50.2 percent in 1985. The communication equipment sector was the most aggressive one. Its exports growth was two times faster than the industrial manufactured products and accounted for 12 percent of the global trade in 2000 after 10 years' expansion by 5 percentage points.

Sectors like computers, information services, financial services, insurance, telecommunication and personal cultural and entertainment enjoyed the fastest growth. Exports of these services contributed 9.4 percent of the global exports in 2002, compared with 6.3 percent in 1985.

But transportation was one of the industries lagging behind the overall expansion. Its share in the global trade was down to 4.5 percent in 2002 from 5.5 percent in 1995. The agri-products decreased to 7.2 percent from 11.3 percent. And mineral products plunged to 9.7 percent from 18.3 percent.

Sharp fluctuation of crude oil prices during 1985 to 2002 pushed the share of crude oil in world trade up and down, presenting a unique scenario in the whole picture.

Robust growth took place in processed produces.

An important thing was that processed produces exports made much more aggressive progress than half-processed or raw produces. This was true either for developing countries or developed countries, especially after the 1990s. Exports of processed farm products began to play an increasingly significant role in the global trade, with the share rising to 48 percent in 2002 from 42 percent from 1990 to 1991.

There are at least two reasons for higher ratio of processed products. One is that such products have more comparative advantages than primary products. The other is that consumers, with the hike of their average income per capita, prefer branded products which have higher added value than primary ones. Further study should be made on how trade policies have influenced the trend.

The World Trade Organization issued another report in April in which the perception of global trade in 2003 and an outlook of world trade recovery in 2004 were available. However, now WTO would like to say things went better than expected in 2003 with an increase of 4.5 percent in global trade. And for 2004, the figure is predicted to reach 7.5 percent.

By People's Daily Online