This projection also assumes that slowing output growth in the United States and Western Europe will be offset somewhat by recovery in Asia.

A faster than expected slowdown in the United States or Western Europe, or slower recovery in Asia, would clearly imply export volume growth below 3.5 per cent in 1999.

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These are among the findings of the WTO’s first report on trade develop­ment last year and the outlook for this year. Other highlights are explained in the subsequent paragraphs.

i. Trade contraction in Asia has been the biggest factor in the global trade slowdown. But there has been a marked slowdown in global export expansion throughout 1998, reflected in the performance of all major regions.

ii. Trade performance measured in volume terms differed widely among regions in 1998, particularly on the import side.

Imports into Asia fell by 8.5 per cent, stagnated or fell slightly in Africa and the Middle East, and expanded by 7.5 per cent in Western Europe and by some 10 per cent in North America, Latin America, at 10 per cent and 6.5 per cent respectively, and increased marginally in Asia (1 per cent).

Western Europe’s export growth was slightly above the global average, at 4.5 per cent, and that of North America was below the average, at 3 per cent.

iii. Export of merchandise and commercial services amounted to US$ 56.5 trillion in 1998. In value terms, merchandise exports amounted to US$ 5.2 trillion and commercial services to US $1.3 trillion.

This represents a fall of almost 2 per cent in dollar terms over exports in 1997, but still exceeds the level attained in 1996. This is the steepest decrease since 1982. Exports of commer­cial services recorded the first annual decline in value terms since comprehensive statistics became available in the mid-1980.

iv. Commodity prices fell sharply in 1998, pushing the share of primary products in world exports below 20 per cent in current price terms for the first time during the postwar period. Oil prices fell by 30 per cent in 1998, or 40 per cent from a year-end to year-end basis.

This picture has been mitigated by increased oil prices in the first quarter of 1999. Non-oil primary commodity prices fell by 15 per cent on a yearly average basis in 1998, and by some 10 per cent on a year-end basis.

Prices of internationally traded manufactured goods and serv­ices also declined in 1998, but by considerably less than those of primary products.

v. Reduced commodity prices have particularly affected the export earn­ings of African and Middle Eastern countries. In addition to the 11 member countries of OPEC, some eight other countries depend on fuel exports for more than 50 per cent of their export earnings.

Over twenty, mostly developing countries depend on agricultural exports for 35 per cent or more of their export earnings, but these countries are generally not as severely affected as the oil exporters by commod­ity price falls.