WTO Director General Pascal Lamy, in his latest sum-up of the Geneva plays, notes with apparent comfort that he has seen “no backsliding of the level of ambition” but warns, “we have not yet seen a tangible progress in the negotiations”. The draft texts on Agriculture and NAMA (Non-agricultural manufacturing areas), drawn up afresh after the collapse of high-level negotiations among leading developed and emerging nations in July 2008, were given initial welcome by WTO member-countries including India. Commerce Minister Anand Sharma soon after taking office talked of a Doha deal close at hand but since then he has been peripatetic signing bilateral deals for trade, with WTO left on the backburner.

The official-level Geneva negotiating committees on agriculture and Nama are still bogged down. reflecting the absence of political will on the part of Governments to move forward to bridge the gaps. The current pace of advance in the committees is “too slow to arrive at modalities (on the basis of which the negotiations would reach the conclusive stage) even by early in 2010”, Mr Lamy says pointing out that unless it got speeded up, the round cannot be wrapped up next year. Senior officials would begin the next round in the third week of November to work on narrowing the differences both in agriculture and Nama, and in the latter case, there is more complexity with much technical work remaining to be done.

Meanwhile, WTO reports that world trade growth in 2008 slumped to 1.5 per cent, especially with the fall-off in demand beginning in the last quarter, when the global financial crisis imploded. For the first time in several years, trade volume was not ahead of world output which was also down to 1.5 per cent in 2008. While 2009 will record a total contraction in trade flows of the order of 11 per cent and the projection for 2010 is another low growth at 2.5 per cent, there has been some recovery from the second quarter of 2009 but which cannot alter the contraction in trade for the world as a whole in 2009.

In value terms, however, the growth in trade in 2008 was 15 per cent, almost as in 2007, but this was partly due to the significant rise in commodity prices in the first half of 2008 including the hefty increase in oil prices. World merchandise exports totalled 15.71 trillion dollars while trade in commercial services, with 12 per cent growth had risen to 3.7 trillion dollars.

The full impact of the recession on trade was being felt only from the fourth quarter of 2008 with export declines in all regions, the highest (18 per cent) in the most closely integrated European Union while trade within Asia and North America also fell by 9 and 10 per cent respectively. The first quarter of 2009 saw further deterioration, falling commodity prices adding to the decline. Asia's trade dipped by 29 per cent in this quarter. Sectorwise, the worst affected was the automotive products, followed by iron and steel and office and telecom equipment.

China became the second largest exporter, after Germany, in 2008 with both at above 1.4 trillion dollars followed by USA (1.28 trillion), Japan (782 billion) while USA remained the largest importer at 2.1 trillion dollars (17 per cent of world imports) followed by Germany 1.2 trillion and China 1.13 trillion. For China, the share of world exports and imports last year stood at 8.9 per cent and 6.9 respectively. India took the 27th place with exports at 177.5 billion with 1.1 per cent share while its imports were at 293.4 billion dollars (1.8 per cent). India has faced structural deficits in merchandise trade so far during the 2000s.

In commercial services, however, India fared better with a surplus, exports at 102.6 billion (2.7 per cent share in world exports) and imports 83.6 billion (2.4 per cent). But China has raised its stature in commercial services also, holding the fifth place (after USA, UK, Germany and France) with exports at 146.4 billion but outpaced by its imports at 158 billion dollars, the respective shares in world trade in commercial services at 3.9 per cent and 4.5 per cent respectively. The global crisis lowered commodity prices and demand for tourism services which affected the least developed countries, in particular.

A breakdown of WTO data for 2008 shows that 85 per cent of world trade is accounted for by Europe, Asia and North America with their shares at 42.9 per cent, 24.8 per cent and 17.2 per cent respectively. Likewise, these three regions conduct bulk of their trade within, the intra-regional shares being 72.8 per cent for European Union,50.1 per cent in Asia and 49.8 per cent in North America. USA has been increasing its exports though it remains the largest global importer. In 2008, its exports grew 6 per cent in volume while imports declined 3.5 per cent. Chronic trade deficits are coming down for USA as it could increase exports, helped by dollar depreciation, also lowering the current account deficit. Volume growth was negative for European Union in both exports (-0.3) and imports (-l.5).

Excluding intra-trade, EU remains the largest exporter to the world at 1.9 trillion dollars (15.9 per cent share) followed by China and USA. In this case, the world share of China and USA also goes up to 11.8 and 10.6 per cent respectively (from 8.9 and 8 per cent if EU is not taken as a single entity for exports.) Among countries making up BRIC, only India has a merchandise trade deficit. Together they accounted for around 18 per cent of world exports last year. Russia was the 10th largest exporter (471 billion dollars) while its imports at 292 billion produced a trade surplus (179 billion), less than China's 292 billion dollars.

The increase in the value of world trade in 2008, despite very moderate volume growth, is attributable largely to price increases, especially commodities, oil in particular, while exchange rate fluctuations also have an impact. From mid-year data for 2009, WTO observes that merchandise trade data since June indicate end of the declining trend. Though there was 8 per cent increase in world trade between first and second quarter, there was still a decline by 33 per cent in the second quarter as compared to the same period in 2008. In commercial services, EU and USA accounted for 60 per cent of exports last year. Exports from Bric continue to grow at a steady rate though individual performance varies. China became the third largest exporter in commercial services. India's exports grew by 17 per cent in 2008 compared to 23 per cent in 2007. The global crisis principally affected services closely linked to trade in goods, such as transportation, while business services remained relatively untouched, according to WTO. Although some sectors have proved more resilient than merchandise trade during the initial phase of the crisis, trade in business services and travel might be particularly vulnerable to the secondary effects of the global crisis if private investment and household consumption levels continue to be sluggish, the world trade body adds. (IPA Service)