JETRO predicts E. Asian trade to further stagnate

JETRO predicts E. Asian trade to further stagnate

TOKYO (DPA): With the currency turmoil hanging over East Asia, trade in the region "is expected to further stagnate in 1998", the Japan External Trade Organization (JETRO) reported in its annual White Paper on International Trade.

The growth of exports in East Asia was held below double digits for the second year in a row to 6.9 percent in 1997.

Imports showed "stunted growth of 1.4 percent because of sluggish domestic demand brought about by the currency crisis", said the report, which summarizes the past year's world trade performance and related trends.

East Asian economies "are wrapped up in the problem of restructuring their financial institutions, making export-led recovery difficult in the near term. More than one year after the crisis began, there are no signs of recovery," JETRO reported.

The organization defines East Asia as the region covering China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand.

According to the report, global trade in goods in 1997 grew 9.6 percent in volume from a year earlier, well above year-on- year growth of 6.2 percent in 1996.

However in U.S. dollar terms (nominal export value base) global trade in 1997 showed a year-on-year increase of only 3.4 percent to US$5.46 trillion, down from a 3.9 percent rise in 1996.

The huge gap between volume- and value-based growth rates is traced to the U.S. dollar's strong gains against other currencies, the report said.

In 1997, Japan's exports to other East Asian countries slipped 1.9 percent, compared with a 6.6 percent increase for the United States and 3.8 percent growth for the European Union.

During the first half of 1998, Japan's trade with the region plummeted, with exports down 22.5 percent from the same period last year and imports down 17.7 percent, JETRO said.

To help stabilize the region's economies at an early date, Japan should resuscitate its economy and take an active role in the creation of new rules for the financial system and more supporting industries.