The Hindu Business Line : WTO lauds India, Vietnam on trade performance

Snapshot
India's merchandise exports touched $120 billion in 2006 taking it to 28th slot among the top 30 exporters of the world
Its position in commercial services exports at $73 billion was at No. 10 in this category

New Delhi April 12 The World Trade Organisation (WTO) has lauded India and Vietnam on their trade performance stating that "since 1995, the exports and imports of these two countries have expanded faster than Asia's trade and their share in world merchandise exports increased markedly."

In its preliminary assessment of global trade in 2006 and prospects for this year, released on Thursday in Geneva, the world trade monitoring body said the fast growing economies of India and Vietnam reported a vigorous expansion of exports and imports, in the range of 20 per cent to 35 per cent in 2006.

Even as India's merchandise exports touched $120 billion in 2006 taking India to the 28th slot among leading 30 exporters of the world, India's position in commercial services exports amounting to $73 billion in 2006 and accounting for a share of 2.7 per cent in global commercial services exports has improved vastly, putting the country in the 10th slot among 30 leading exporters in this category. Interestingly, China's commercial services exports are estimated to have surpassed those of the Netherlands and India.

While the dynamic growth of India's commercial and in particular software services exports are widely known, "the dynamic expansion of its services imports attracts less attention with India's commercial services imports now only about five per cent short of its commercial services exports." India ranks 11th among 30 leading commercial service importers at $70 billion and accounting for a share of 2.7 per cent in world imports in 2006, WTO said.

At $174 billion in imports, India occupies 17th slot among 30 leading importers of the world and if the 25-countries intra-European Union (EU) import is excluded, India's position moves to the 11th slot in 2006 among the top 30 importers of the world.

Similarly, if the intra-EU exports are excluded, India's position moves to 20th slot among 30 leading exporters.

Providing a synoptic picture of trends in global trade in merchandise goods and services, WTO said the dollar value of world merchandise exports increased by 15 per cent to $11.76 trillion in 2006 and commercial services exports were up by an estimated 11 per cent and reached $2.71 trillion. It said since 2003, commercial services exports expanded less rapidly each year than merchandise trade.

In volume terms, the eight per cent expansion in merchandise trade growth in 2006 was the second highest since 2000.

With global economic growth forecast to grow around three per cent this year, this could slow merchandise trade growth to about six per cent in 2007.

Stating that world merchandise exports in dollar value terms were strongly swayed by price developments in 2006, the WTO report cites IMF commodity price indices according to which the world export prices of minerals and non-ferrous metals rose by 56 per cent, those of fuels by 20 per cent and those of food and agriculture raw materials by 10 per cent.

In contrast, export prices of manufactured goods are estimated to have risen by not more than three per cent.

"An important element in the moderate price trends for manufactured goods was the continued decline in prices for electronic goods, which accounted for more than one in six dollars of world exports of manufactured goods in 2005," WTO said adding that these shifts in relative prices are explained largely by the different regional export unit values (prices) which ranged from four per cent to five per cent for Asia and Europe to about 18 per cent to 20 per cent for exports of South and Central America, Africa, West Asia and the Commonwealth of Independent States (CIS).

According to the report, developing countries' share of world merchandise exports reached an all time record of 36 per cent in 2006 and the 0.9 per cent share for least-developed countries was also a record, the highest level since 1980.

"The strong performance of 2006 is welcome, particularly the gains made by developing and least-developed countries," WTO Director General Mr Pascal Lamy said, adding that "this has to be consolidated" through a successful conclusion of the Doha Round.