PRESENTATION ON

GLOBAL TRADE VOLUME

By- Virendra Swaroop Sahu

Sneh Thakur
Rakhi Trivedi
Divya Agnihotri
Sanjari Gupta
Shubhang Sharma
Ronak Gugalia
Amrat Borashi
Shirish Nigam
Vivek Verma
 W.T.O.  INTRODUCTION

 The World Trade Organization (WTO) is an

international organization designed to supervise and
liberalize international trade.
 Came into being on 1 January 1995, and is the
successor to the General Agreement on Tariffs and
Trade(GATT).
 The WTO has 153 members, which represents more
than 95% of total world trade.
 INTRODUCTION CONT….D
 The WTO's headquarters is in Geneva, Switzerland.
 Formation: 1 January 1995
 Headquarters: Geneva, Switzerland.
 Membership :153 member states.
 Official languages: English, French, Spanish.
 Director-General: Pascal Lamy.
 Budget:180 million Swiss francs (approx. 163 million
US dollars) in 2008.
 Staff :625 Employees.
 FUNCTIONS:

 It oversees the implementation, administration and

operation of the covered agreements.
 It provides a forum for negotiations and for settling
disputes.
 It is the WTO's duty to review the national trade
policies, and to ensure the transparency of trade
policies in global economic policy-making.
 FUNCTIONS: CONT….D

 Another priority of the WTO is the assistance of

developing, least-developed and low-income
countries in transition to adjust to WTO rules and
disciplines through technical cooperation and
training.
 The WTO is also a center of economic research
and analysis
 the WTO cooperates closely with the IMF and the
World Bank.
 PRINCIPLES:

 Non-Discrimination: A WTO member must apply the

same conditions on all trade with other WTO members,
i.e. a WTO member has to grant the most favorable
conditions under which it allows trade in a certain
product type to all other WTO members.
 Reciprocity. for a nation to negotiate, it is necessary
that the gain from doing so be greater than the gain
available from unilateral liberalization .
 PRINCIPLES: CONT….D
. Binding and enforceable commitments. a country
can change its bindings, but only after negotiating
with its trading partners, which could mean
compensating them for loss of trade.
 Transparency. The WTO members are required to
publish their trade regulations, to maintain
institutions allowing for the review of administrative
decisions affecting trade, to respond to requests for
information by other members, and to notify
changes in trade policies to the WTO. These internal
transparency requirements are supplemented by
periodic country-specific reports
 PRINCIPLES: CONT…..D
 Safety valves: In specific circumstances,
governments are able to restrict trade, aimed at
ensuring "fair competition"; and provisions
permitting intervention in trade for economic reasons.
 NAFTA:

 The North American Free Trade Agreement

(NAFTA) is a trilateral trade block in North
America created by the governments of the United
States, Canada, and Mexico.
 U.S. President George H.W. Bush, Canadian
Prime Minister Brian Mulroney and Mexico's
President Carlos Salinas, signed the agreement.
 The agreement was signed into law in the U.S. on
December 8, 1993 by President Bill Clinton and
went into effect on January 1, 1994.
GNP OF THE WORLD
 1995 WORLD GNP: When WTO was
Formed

FROM THE RESEARCH CENTRE FOR GLOBAL

GOVERNANCE (RCGG) :
The world's total Gross National Product of 27687
billions of U.S. dollars was distributed as follows:
 United States 26%, Japan18%,Germany8 %

 France 5 %, United Kingdom 4%

 Italy 4% ,Canada 2 %, Russia 1 %

GDP OF THE WORLD
 G D P o f th e w o rld in p e rc e n ta g e

5 .0 4 .2
3 .9 3 .7
4 .0 3 .3 3 .4 3 .2 3 .4
2 .9
3 .0 2 .3 2 .6
G D P o f th e w o rld in
Percentage

2 .1
1 .8 p e rc e n ta g e
2 .0 1 .5
1 .0
0 .0
95

97

99

01

03

05

07
19

20

20
19

19

20

20

ye a r s
 G D P O f T h e W o rld

6 0 0 0 0 .0
5 0 0 0 0 .0
4 0 0 0 0 .0
By Value

3 0 0 0 0 .0 a n n u a l g ro w t h
2 0 0 0 0 .0
1 0 0 0 0 .0
0 .0
95

97

99

03

05

07
01
19

19

19

20

20

20

20
Ye a rs
 G D P O f T h e W o rld

6 0 0 0 0 .0
5 0 0 0 0 .0
4 0 0 0 0 .0
By Value

3 0 0 0 0 .0 a n n u a l g ro w th
2 0 0 0 0 .0
1 0 0 0 0 .0
0 .0
99

03

05

07
95

97

01

20

20
19

19

19

20

20

Y e a rs
WORLD EXPORT OF MERCHANDISE
GOODS & COMMERCIAL SERVICES
 W o r ld Ex p o r ts O f M e r c h a n d is e G o o d s & C o m m e r c ia l S e r v ic e s

25 22

20 18
15 16
13 14 15 15
15 12
9 10 10 11 11
Annual Growth Rate (%)

10 6 5.5.5 6 6 M e r c h a n d is e G o o d s
5
5 3 34 4
C o m m e r c ia l S e r v ic e s
1 0
0

-5
95
96
97
98
99
00
01
02
03
04
05
06
07
-4
19
19
19
19
19
20
20
20
20
20
20
20
20
-10
Y ears
 W o r ld E x p o r t s O f M e r c h a n d is e G o o d s & C o m m e r c ia
S e r v ic e s

15000

10000
Values(Billion $)

M e rc h a n d is e G o o d s
5000 C o m m e rc ia l S e rvic e s

0
95

97

99

01

03

05

07
19

20
19

19

20

20

20

Ye a rs
COMPARISION
 Regional shares in world merchandise exports,
2000 and 2007
45
40
35
30
25
20
15
10
5
0
NorthAmerica Southand Europe Commonwealth Africa MiddleEast Asia
Central of Independent
America States (CIS)

2000 2007
World Export & Import
 World economic growth
expected to slow down in 2008
Growth in developing countries
and economies in transition
weakening but still robust
Growth in Africa accelerating,
slower growth in other
developing regions
Share in World Merchandise & Commercial
Services Trade By Region,2005.
Share in World Merchandise & Commercial
Services Trade By Region,2005.
 Economic Scenario
 World economy featured recently robust real economic growth,
averaging about 4.5-5.5 percent per year during 2003–07.
 Commodities markets experienced highest inflation rates in
post-war period with all commodities price index increasing at
23 percent per year during 2003–07.
 Crude oil prices hit US$119/barrel in April 2008 and goes down
about US$50 in dramatic way.
 The exchange rate of the U.S. dollar has depreciated
considerably during 2002–08 and might fall further.
 Financial markets face high uncertainty, credit risks, and
depreciating currencies.
 Trade Situation In 2007
 `
Pattern Of World Trade
 Pattern Of The World Trade
1870-1913 1913-50 1950-73 1973-98
World 3.4 0.9 7.9 5.1
France 2.8 1.1 8.2 4.7
Germany 4.1 -2.8 12.4 4.4
UK 2.8 0.0 3.9 4.4
US 4.9 2.2 6.3 6.0
Spain 3.5 -1.6 9.2 9.0
Mexico 5.4 -0.5 4.3 10.9
Brazil 1.9 1.7 2.7 6.8
China 2.6 1.1 2.7 11.8
India 2.4 -1.5 2.5 5.9
Japan 8.5 2.0 15.4 5.3
World’s 10 Largest Exporters and Importers, 2007
 Market size

 Imports are a good indicator of the size of a

national market as well as the flows of
merchandises servicing the needs of an economy.
 The United States, Germany, China and Japan
are the world's largest importers and
consequently the world's largest economies.
 Germany has recently become the world’s
largest exporter.(2000 onwards)
 the rank of China is the second largest in 2007.
 Trade imbalances

 the United States and the United Kingdom, have significant trade deficits which
are reflected in their balance of payments. The United States has reached a
staggering trade imbalance, which accounted to more than $854 billion in 2007.
This aspect is dominantly linked with service and technology-oriented economies
that have experienced a relocation of labor-intensive production activities to
lower costs locations. They are highly dependent on the efficient distribution of
goods and commodities.
 countries having a positive trade balance tend to be export-oriented with a level
of dependency on international markets. Germany, Japan, Canada and China are
among the most notable examples.
 China has a positive trade balance, but most of this surplus concerns the United
States. It maintains a negative trade balance with many of its partners,
especially resources providers (e.g. Australia).
 a phase of asset inflation(after 2007) (e.g. real estate bubble), particularly in the
United States and several European countries (e.g. United Kingdom, Spain)
coupled with heavy borrowing using these assets as collateral.
 A share of this debt was used for the purpose of consumption of imported goods
 Current Scenario
 Germany is heavily dependent on exports. Exports account for about a
fourth of the German economy.
 In other words, if the world economy slows down, Germany will suffer an
outsized decline.
 nations dependent on exports for growth
 exporting nation will fall down if the world economy of higher energy
costs or the slowing of U.S. consumer spending.
 The highest effected country is Zimbabwe.
 an inflation rate of over 230million % .
 they rely heavily on loans from outside the country.
 However, other highly effected countries are well developed countries.
 This is because they have a substational Public Debt as well as an External
Debt which is sometimes 4 times the size of their GDP, their low foreign
currency reserves also means they are somewhat limited in they ways
they can help themselves
 US is quite well.
 because their External Debt is not very big in comparison with their GDP.
 they can be even better (lower) because they have the power to print
dollars which is still a very powerful international currency.
 Russia and China.
 Both countries have low public debts, low external debts
and high reserves of foreign currency.
 China
 rely heavily on exports,
 but this can be offset by the high level of foreign currency
reserves.
 They can lend this money to other countries which in turn
buy Chinese products with or exchange the money for
Chinese currency and help their own economy.
 Russia
 they are primarily a gas and oil exporter and they just
cannot replace foreign demand with internal one.