Associated Press / Naomi Koppel, Associated Press Writer
GENEVA (AP) -- Buoyed by booming U.S. demand, international trade grew strongly at the end of last year, but many countries in Latin America and East Europe saw exports fall, the World Trade Organization said in its annual report released today.
The report said global trade in 1999 totaled $6.95 trillion. The volume of goods trade rose by 4.5 percent, and for the final quarter was up 6.5 percent, while trade in services increased by 2 percent.
"Demand in the United States and the Asian recovery were the motors of the global trade expansion in 1999," the report said.
"The outstanding strength of United States investment and private consumption benefited not only (North America) but also sustained the recovery in Asia and to a lesser extent output in Western Europe," it said.
The United States imported more than $1 trillion of goods -- a 12 percent increase on 1998 -- but only exported $695 billion, leading to a record current account deficit.
Foreign investments have been flooding into the United States, and U.S. consumers are spending more than ever before, but it is unclear how long that can continue without creating inflationary pressures, the WTO said.
"A reversal in foreign investors' appreciation of future earnings in the United States or a cutback in U.S. consumption or investment growth could rapidly change the size of the U.S. current account deficit," it said.
Michael Finger, head of the WTO's economic research and analysis division, said much of the growth in trade worldwide could be attributed to the boom in electronic goods and automobiles -- but that meant that some countries did better than others.
"Recovery in Asia was impressive, but still had elements of uneasiness and fragility. Not all countries benefited. Those countries which had a strong electronics industry benefited most," he said.
Developing countries generally did well in 1999, with trade in goods rising at almost twice the world average, the report said.
But the 48 least-developed countries, many of which depend on exports of commodities rather than manufactured goods, had differing fortunes as the price of food and drink fell by 15 percent and non-fuel commodities hit a 10-year low.
Former communist East European countries and Latin American nations except Mexico actually saw a drop in trade, the report said.
In 2000, it said, the volume of trade in goods should increase by 6.5 percent.
"Higher trade is possible, in particular if the demand in Western Europe and Japan pick up more strongly than currently projected," it said.
"North America and the developing countries in Asia, which recorded double digit import growth in 1999, are expected to expand their imports less rapidly in 2000, and the projected deceleration of North America's final demand should lead to less dynamic import growth in 2000.":
