Huge Expansion In World Trade Last Year

Press, Volume XCIII, Issue 27990, 9 June 1956, Page 9

Huge Expansion In World Trade Last Year

(Rec. 8 p.m.) GENEVA, June 7. The value and volume of international trade established new records in 1955, according to a report published by the General Agreement on Tariff's and Trade (G.A.T.T.) in Geneva today.

The 229-page report said that in the first half of 1955 the value of world exports exceded 80,000,000,000 United States dollars at an annual rate. In the second half it rose by a further 5,700.000,000 dollars, thus reaching a value which stood about 13 per cent, above that of 1951. In terms of volume, the increase was even more impressive, because export prices as a whole—though rising slowly since 1954—were nevertheless appreciably lower than in -1951. In the second half of 1955, the volume of world exports exceeded that of 1951 by more than one-fifth. The report pointed out that this extraordinary increase had kept pace with the growth of the world’s industrial production, which, in 1955, stood nearly 10 per cent, higher than in 1954. ” . There were three major developments in international trade in 1955: First, the rise in value of world exports in 1955 was again mainly accounted for by trade among industrial countries, while the relative importance of the non-industrial areas (both as suppliers to the industrial areas and as markets for their products) continued to decline. Second, the increase in industrial export trade in 1955 was shared by North America and other industrial areas. The revival of North America’s exports was caused largely by a growing dependence of Western Europe on supplies of raw materials and fuels from that source. Third, in 1955, many industrial countries —in order to meet increased competition on world markets by lowering their costs of productionrelied more heavily on imports from the most economic sources of supply.

The report said recent developments confirmed the tendency for the share of trade between the industrial and non-industrial parts of the world to decline. This share, which had been 55 per cent, in 1937, became 53 per cent, in 1950, and fell to 50.7 per cent, in 1955.

Examining the main causes of this decline, the report referred to the increase in the production of natural raw materials and fuels in the indus-

trial areas themselves, the effect of the increased production of manufactured raw materials on international trade and the effect of the relative decline of the textile industries in the industrial areas on trade between the industrial and non-industrial areas. Food Surplus Exports The disposal of agricultural surplus commodities appeared to have played a larger part in the increase of United States exports in 1955 than in 1954. In 1955 the total imports of North America from outside sources were 1,110,000,000 dollars larger than in 1954. North America appeared recently to have been losing some of its advantage over other exporters in the supply of capital goods. Since 1952, there had been a relative shrinkage in the nonindustrial markets for manufactured goods. , The report said that the supply situation in 1955 showed three distinguishing categories in international trade:—

Stocks of food products, cereals, sugar and coffee were large. Stocks of rice, cocoa, tea, butter, tobacco, raw wool and certain oils and fats were at normal levels.

Metals, solid fuels, rubber and olive oil were in short supply.

It said the international trade in raw materials for steel making had showp a considerable rise in volume in the last few years. The output of crude steel in the main producing countries —the United States. the European Coal and Steel Community and Japan—in 1955 amounted to about 188,000,000 tons, which was about 37,000,000 tons more than in 1954. But this sharp increase was not large enough to cope with an even stronger rise in demand both in the producing countries themselves and in countries which rely mainly on imports. In both cases, there were larger steel imports. The United Kingdom imported, in 1955. three times as much as in 1954 with only a moderate increase ifl exports, and Western Germany also im-_ ported more * while exports were almost unchanged.

In dealing with the growing importance of Russia. Eastern Europe and Communist China in world trade, the report made these points:— The value of the trade of these countries was not as as was expected on the basis, of the trade agreementsreontracted with other countries during recent years. In spite of its re-

cent increase, the value of trade in 1955 between Russia and Eastern Europe, on the one hand, and the Western world, on the other, was not higher than the value of either Australia’s or Sweden’s trade in 1955. Trade Surplus In 1955, with the exception of Japan and the overseas sterling area, Russia and Eastern Europe had a trade surplus with all major trading groups. Communist China too, had a substantial .export surplus in 1955 (as in 1954) because her imports had been able to grow only very slowly in view of the restrictions still maintained on exports to mainland China. Following the reorientation of the commercial policy of Eastern European countries, the composition of their exports had undergone a significant -shift in favour of manufactures. They now appeared to be able to ship capital equipment and semi-manufac-tures as readily as did the industrial countries of the Western world. Eastern European countries might have a competitive advantage in the supply of capital goods over the mdjor Western industrial nations by a more advanced technical integration in the form of exchange of designs, etc., within the area and the specialisation that had occurred in the various countries of the area.