Strategy

WTO Warns about Higher Oil Prices

Rising fuel costs will contribute to a significant slowing in world-trade growth for this year, to 6.5 percent from 9 percent in 2004, according to...
Stephen TaubOctober 28, 2005

Add slower world-trade growth to the long list of casualties of sharply rising oil prices — a list that already includes higher inflation, larger than expected airline losses, higher chemical costs, and slower consumer spending.

The World Trade Organization (WTO) has trotted out a report predicting that higher oil prices would contribute to a significant slowing in world-trade growth for this year, to 6.5 percent from 9 percent in 2004. “While growth in trade will remain satisfactory in 2005, the decelerating trend is cause for some concern,” said Pascal Lamy, the WTO’s director-general.

That deceleration would follow a year of growth. In 2004, world merchandise exports increased in nominal terms by 21 percent, to $8.9 trillion, according to the report. In real terms, merchandise exports rose by 9 percent in 2004 compared with less than 5 percent in 2003, according to the WTO.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Further, trade in commercial services grew in nominal terms by 18 percent, to $2.1 trillion in 2004, a much stronger growth rate than the 14 percent recorded in the previous year.

Lamy stressed the need to create more opportunities for trade in developing countries and to adjust global trade rules. Specifically, he called for a successful conclusion of the Doha Development Agenda round of global trade talks.

In its report, the WTO noted that oil-exporting regions (the Commonwealth of Independent States, the Middle East, and Africa) boosted their merchandise exports much faster than the global average.

In contrast, North America and Europe — among the largest oil importers — are the two regions in which merchandise export and import growth remained below the global averages in 2004.