Trade Grows Faster Than Global Output
WORLD trade should grow by 7 percent this year. That's the estimate of the General Agreement on Tariffs and Trade (GATT). In its annual outlook, the Geneva-based international trade organization estimates that merchandise trade volume rose 8.5 percent in 1988. In explaining why the growth in world commerce is outstripping growth in world output by almost 2 to 1, GATT economists point to a number of changes:
Technological innovations are widening the scope of traded goods and services.
The real cost of petroleum has fallen by one-half since its peak in 1980, bringing substantial savings to business and households.
The share of manufactured goods in world trade, in terms of value, has increased by one-third since 1980. These goods now account for 73 percent of the value of world merchandise trade and about one-half of the exports of developing countries.
The number of international joint ventures and mergers is growing alongside the rapidly expanding globalization of financial markets.