A. International trade in goods and services in 2002-2003
2. Trade in goods: the dynamic of purchasing markets and products
merchandise for the different countries project growth at approximately 16% for the entire year 2003. As in recent years, developing countries’ exports have been the most dynamic segment, with China’s persistent buoyant growth continuing to be the most outstanding. Although the negative growth in Latin American exports was reversed, average aggregate growth, as
discussed later, was lower than in other regions, standing below the world average (see table I.2).
By the end of 2002, the value of world exports was back at the 2000 level. Growth of just over 4% cancelled out the fall by a similar rate recorded in 2001. Exports from the European Union and the countries of South, East and South-East Asia and to a lesser extent those of Japan, contributed to the
Table I.2
WORLD EXPORTS BY REGION AND PRINCIPAL ECONOMIES, 2001-2003
(Billions of current dollars and percentages)
Value exports of goods Annual variation
Countries/Regions 2001 2002 2003c 2001 2002 2003c World 6 128 6 385 7 393 -3.7 4.2 15.8 Industrialized countries 3 872 3 984 4 555 -3.2 2.9 14.3 United States 731 694 725 -6.4 -5.1 4.4 Canada 260 252 271 -6.1 -3.1 7.6 Australia 63 65 70 -1.6 3.2 8.1 Japan 403 417 472 -15.9 3.5 13.2 New Zealand 14 14 16 3.0 5.1 14.8 Europea 2 363 2 504 2 951 0.6 5.9 17.8 Austria 67 73 88 3.9 9.0 20.9 Germany 571 613 749 3.8 7.4 22.2 Belgium 190 213 252 1.1 12.1 18.3 Denmark 51 56 66 2.0 10.1 17.9 Spain 115 124 157 1.7 7.2 26.3 Finland 43 45 53 -5.9 4.2 17.2 France 296 309 362 -1.3 4.4 17.0 Netherlands 216 222 265 3.3 2.8 19.2 Ireland 83 87 92 7.7 5.3 5.6 Italy 244 253 287 1.7 3.7 13.5 Luxembourg 8 9 11 0.0 12.5 18.8 Norway 59 60 69 -1.5 0.8 14.5 United Kingdom 267 276 306 -5.3 3.4 10.9 Sweden 76 81 99 -12.9 7.0 22.5 Switzerland 78 84 97 4.0 7.7 15.8 Developing countries 2 256 2 401 2 836 -4.6 6.5 18.1 Africa 119 121 148 -5.8 1.4 22.1 Developing Asia 1 183 1 279 1 519 -6.6 8.1 18.8 India 43 49 56 2.1 13.9 13.5
East and South-East Asiab 1 036 1 142 1 355 -7.1 10.3 18.6
China 266 326 438 6.8 22.6 34.5
Philippines 33 36 37 -17.8 11.0 1.7
Hong Kong
(Special Administrative Region of China) 190 200 224 -5.9 5.3 11.8
Malaysia 88 93 104 -10.4 6.0 11.5
Taiwan, Province of China 123 131 134 -17.1 6.5 2.4
Republic of Korea 150 162 193 -12.8 8.0 19.3
Singapore 122 125 144 -11.6 2.8 15.2
Thailand 65 69 81 -5.8 6.2 17.1
Central and Eastern Europe 358 393 503 5.4 9.6 28.0
Latin America and the Caribbean 356 358 388 -4.1 0.6 8.3
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information from the International Monetary Fund (IMF),
“International Financial Statistics” [on line] November and December 2003, and April 2004 (http://www.imfstatistics.org/imf/ ifsbrowser.aspx?branch=ROOT), and official information from Latin America and the Caribbean.
aIncludes only the 15 European countries mentioned.
bIncludes only China, Philippines, Hong Kong (Special Administrative Region of China), Malaysia, Taiwan, Province of China, Republic of Korea,
Singapore and Thailand.
recovery of trade flows in 2002, insofar as a strong contraction in United States exports was observed. An analytical disaggregation of exports and imports in 2001- 2002 by major country and world region, showing both increase and contribution to total growth, serves to quantify the role that the developing countries have played in the expansion of world trade in recent years (see figure I.3a and I.3b).
In 2002, the remarkable expansion in exports from developing countries, in particular those from South, East and South-East Asia, accounts for 63% of the growth in world trade, while the developed countries contributed the remaining 37% (see figure I.3b). The scant contribution of the countries of Latin America and the Caribbean is due to the limited increase in their exports over the year. China, whose exports in 2001 were equivalent to 78% of Latin America’s, in 2002 added close to US$ 60 billion to the total, that is, practically all that Brazil exported during that period. China’s increase represents 1% of world trade or one percentage point of the 5% total, that is, 23% of the increase in the world export value. In 2003, exports from China outstripped by 13% the total exported by Latin America and the Caribbean.
In this context, it is appropriate to underscore the interdependence of trade flows, which are the result of complex relations of buying and selling, between firms of different countries, of raw materials, inputs, parts and components of products processed in distant parts of the globe. This corroborates the statement that trade is not a zero sum game in which the increase in exports in some countries would necessarily represent the decrease in the exports of others. The expansion of external sales of countries such as China, India, Malaysia, Republic of Korea, Singapore, Thailand, Taiwan, Province of China, but also of Central and Eastern countries converts them into new poles of demand for products of Latin America and the Caribbean. For its part, China has incorporated itself into the global trade flows with an extraordinary demand for agricultural raw materials and minerals.2 As a result of their
forthcoming incorporation into the expanded market of the European Union, principal destination for garment exports, chemicals, paper and cardboard, machinery and electrical appliances as well as for iron and steel manufactures, Central and Eastern European countries represent a potential demand for products from the developing countries (ICEX, 2002) (see box I.1).
22.6 3.5 5.5 4.2 1.4 6.5 3.0 10.1 11.1 0.6 -5.1 4.2 2.4 1.9 2.2 1.6 1.0 0.6 0.2 0.0 0,0 -0.6 -10 -5 0 5 10 15 20 25 World United States Africa Latin America Japan Central and Eastern Europe China East and South East Asia Western Europe Developed countries Developing countries
Growth 2002 Contribution for world growth
0.7 0.8 15.1 38.8 45.4 56.4 23.3 5.4 51.5 -14.4 -20 0 20 40 60 80 Impact on growth Figure I.3a
WORLD TRADE AND EXPORTS: GROWTH, CONTRIBUTION AND IMPACT, BY REGIONS AND SELECTED COUNTRIES, 2002a
(Growth rates and percentages)
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information supplied by the
International Monetary Fund (IMF).
aThe contribution is the ratio of the relative growth of each country’s exports during the period 2001-2002 to the absolute
variation in world exports between 2001 and 2002. The sign indicates the direction of that contribution. The impact rate is measured as the contribution of the growth of exports of the country to the total growth of world exports. The sign indicates the direction of that share.
-
2 The demand for steel from China could amount to 257 million metric tons, in 2003, an increase of 22% compared with 2002, according to the International Iron and Steel Institute of Brussels and it is estimated that it could rise another 12.8% in 2004. Without China, world demand for steel would have grown by as little as 1.2% from 2002 on, whereas China’s demand helps to drive the growth rate up to 6.4% (“El acero sube por mayor demanda en Asia y débil oferta en Estados Unidos”, El Mercurio (The Wall Street Journal Americas, 15 October 2003, p. B9).
Figure I.3b
WORLD TRADE AND IMPORTS: GROWTH, CONTRIBUTION AND IMPACT BY SELECTED REGIONS AND COUNTRIES, 2002 a
(Growth rates and percentages)
-6.9 -3.4 3.3 12.7 8.6 2.3 7.5 21.2 2.0 4.7 4.1 -0.4 -0.2 0.1 0.4 0.7 0.8 1.2 1.9 1.5 2.6 4.1 -10 -5 0 5 10 15 20 25 World Latin America Japan Africa United States Central and Eastern Europe China East and South East Asia Western Europe Developed countries Developing countries
Growth 2002 Contribution to world growth
-4.6 1.4 18.4 29.6 36.7 63.3 20.1 9.1 46.6 -10.3 -20 0 20 40 60 80 Impact on growth
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information supplied by the International Monetary
Fund (IMF).
aThe contribution is the ratio of the relative growth of each country’s imports during the period 2001-2002 to the absolute variation in world imports
between 2001 and 2002. The sign indicates the direction of that contribution. The impact ratio is measured as the contribution of the growth in the country’s imports to total growth of world imports. The sign indicates the direction of that share.
-
Growth 2002 Contribution to world growth
Box I.1
THE COUNTRIES OF CENTRAL AND EASTERN EUROPE
Following lengthy negotiations and the eventual satisfaction of the European Union’s demanding admissions criteria, 10 countries –eight from Central and Eastern Europe together with Cyprus and Malta– acceded to the Uniona on 1 May 2004. Although the association transcends the
economic sphere, the removal of non- tariff barriers and restrictions on the movement of persons, goods and capital will undoubtedly have an impact on trade and investment. The European Union’s current financial commitments for the period 2004- 2006 to facilitate the association
amount to almost 41 billion euros and will be used especially to finance the reforms derived from the
implementation of structural policies and policies for modernization of the agricultural sector.
The table below presents data on the structure of these economies:
Exports from the European Union to the countries of Central and Eastern Europe account for more than 12% of European exports, while imports originating in those countries account for more than 10% of total European imports. Data for 2002 indicate that this group of countries has a relative weight
similar to that of Latin America (not including Mexico) since it accounted for 2.3% of exports and 2.7% of global imports. On the one hand, for the region, the countries of Central and Eastern Europe are major competitors on European markets in specific areas, such as textiles, a few agricultural
products, steel and others. However, the economic expansion of these economies in transition and the wider European market will signify opportunities for the export of other products from Latin America, such as soybean and other grains, the iron and copper manufactures and others. aThe countries of Central and Eastern Europe which have acceded to the European Union are the Czech Republic, Estonia,
Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. The Copenhagen criteria are democracy and institutional stability, the rule of law, respect for human rights, market economy, competitive capacity and ability to comply with economic and monetary union standards.
COUNTRIES OF CENTRAL AND EASTERN EUROPE: ECONOMIC INDICATORS (2002)
Population (millions of inhabitants) 73.1
Exports (billions of dollars) 143.0
Imports (billions of dollars) 164.1
Current account balance (billions of dollars) -17.7
Source: The Economist Intelligence Unit (EIU), “Forecast Eastern Union”, 4 September 2003. Note: Data for Cyprus and Malta are not included.
The World Trade Organization (WTO) indicated that trade between developing countries (South-South trade) has been growing in the last few years at an average rate of 10%, double the average for global trade. Between 1990 and 2001, the proportion of this segment in the total of trade flows increased from 6.5% to 10.7%; or in nominal values, trade between developing countries grew from US$ 219 billion to US$ 640 billion. In 2001, exports to other developing countries represented 27% of the total exports of developing countries as a whole and 41% of their imports originated in these same countries. More than two thirds of this trade originated in and was directed towards the Asian countries. In 2003, China must surpass the United States as the main market for the Republic of Korea.3 Exports from Latin America
to the other developing countries added US$ 82,000 or 13% of south-south trade, of which 72% were concentrated in the same region. As analysed below, trade within the subregional schemes represent approximately 15% of the total exchange within the region. On average, 40% of exports from developing countries in Asia and Latin America (excluding Mexico) are directed towards other developing countries. Some items such as iron and steel, chemicals, textiles, machinery and transport equipment, in particular office and telecommunications equipment, agricultural and mining products are important components of this south- south trade (WTO, 2003h).
However, the strongest impetus to world trade continues to come from the United States merchandise imports. An economy equivalent to almost one third of the world economy can have a profound influence on the generation of world trade flows. In the last three years, it had imported one and a half times more than it exported, which was equivalent to more than 11% of GDP, accumulating heavy deficits in the trade in goods, which cannot be offset by the small surplus generated in the trade in services.4 The larger deficits originate in consumer
3 In a recent article, Rubens Ricupero, Secretary General of UNCTAD explains the formation of the great alliance between Brazil, China, India and South Africa during preparations for the WTO Ministerial Conference in Cancún, owing to the economic success of the Asian countries and the creation of autonomous sources of demand for imports from other countries (Ricupero, 2003).
4 The sum of exports and imports of the United States now corresponds to more than 19% of GDP.
5 Argentina, Bahamas, Brazil, Chile, Costa Rica, Dominica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Trinidad and Tobago and Venezuela (http:///dataweb.usitc.gov).
goods, automobiles and intermediate inputs (including oil), at a time when, in 2002-2003, United States trade was in deficit with all its trading partners. The countries which accumulated the largest surpluses in their trade with the United States were China, Japan, Canada, Mexico and Germany, which together accounted for almost 50% of the United States total merchandise trade deficit (BEA, 2003c). A large number of countries of Latin America and the Caribbean benefited from the increase in imports from the United States in 2002 (see table I.3).5
In recent years, the question that analysts have been asking is whether the United States can continue to be the engine of global growth, if one considers the adjustments that will be necessary to reduce the current account deficit. The low dynamism of European Union trade, oriented basically towards European countries that are already integrated or in the process of integration, makes it an unlikely candidate to replace the purchasing power of the United States economy, principally for Latin America and the Caribbean (see table I.4). If purchases made within the European Union are discounted, world trade stands at US$ 5.2 billion and the proportion of United States imports increases from 20% to just over 23% of the total.
Trends in the prices of the main Latin American and Caribbean export products
In the first half of 2003, uncertainties arising from the invasion of Iraq, SARS and sluggish economic activity in the main countries had an impact on the prices of non-energy commodities. The fall in real terms was not felt in the nominal dollar values owing to the depreciation of that currency vis-à-vis other international currencies (IMF, 2003a). In nominal values, the prices of commodities (excluding oil) are estimated to rise by 5.8% in 2003 and by 8% in real terms in 2005 (WTO, 2003h) (see table I.5 and box I.2).
Table I.3
UNITED STATES: GROWTH IN IMPORTS FROM LATIN AMERICA AND THE CARIBBEAN, 2002-2003
(Monthly and cumulative growth rates)
2002 2003 Jan.-Dec.
Subregions/Countries
Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 2002 2003
Latin America and
the Caribbean 14.2 7.1 14.7 11.6 3.6 1.2 4.8 3.1 -0.5 4.0 0.5 2.2 16.4 2.7 5.4 MERCOSUR 32.5 18.6 30.7 30.4 14.5 9.1 5.8 8.5 4.6 5.3 -4.9 4.1 5.5 8.4 9.8 Argentina 50.3 -11.9 45.3 -12.7 3.4 8.0 -0.8 -1.6 11.0 5.2 -21.6 -26.4 -6.8 5.6 -2.8 Brazil 29.4 26.2 28.6 40.2 16.7 9.8 7.1 10.7 3.0 4.7 -3.3 11.5 7.3 9.3 12.0 Uruguay 0.6 -3.7 -7.8 -12.6 17.6 -10.2 4.2 -5.8 63.6 72.4 142.0 42.0 91.9 -15.2 31.0 Paraguay 97.5 37.6 -13.1 161.8 12.9 -37.1 -2.3 4.2 -14.1 -4.1 60.8 50.5 -9.7 33.7 14.7 Chile 10.8 -14.7 6.4 10.8 6.8 10.0 -5.6 31.4 -6.0 29.0 0.8 7.5 3.6 6.4 5.2 Andean Community 21.3 -14.5 21.5 19.7 27.4 11.1 29.4 10.5 12.8 5.3 -6.2 7.5 50.8 -0.1 13.5 Bolivia -14.4 -4.6 24.9 31.2 24.7 21.5 40.7 59.7 14.1 11.9 -28.7 -5.9 57.7 -3.7 15.4 Colombia 41.9 15.5 34.7 16.2 27.7 16.4 32.4 19.4 21.1 10.5 -6.7 -6.6 -4.7 -1.6 13.2 Ecuador 46.6 46.4 59.2 26.7 18.1 -4.7 39.5 32.6 25.8 41.5 5.6 22.4 18.3 5.1 25.5 Peru 43.7 10.5 52.5 80.8 0.8 17.0 21.6 17.4 28.6 -7.4 23.3 42.4 39.1 5.0 25.1 Venezuela 6.4 -41.4 2.9 14.0 33.4 11.1 27.9 3.7 7.0 1.3 -10.9 6.4 89.5 -0.8 10.4 Mexico 8.7 7.4 10.7 5.4 -4.9 -3.9 -0.2 -2.1 -4.7 2.9 1.9 1.1 11.9 2.5 1.8 CACM 20.7 17.2 14.0 17.1 10.7 5.3 1.3 2.6 -4.6 -0.1 -2.3 -5.7 5.0 7.0 4.6 Costa Rica 16.2 36.0 23.5 19.5 10.3 8.4 5.7 7.6 -6.0 -4.1 -0.2 -6.1 -0.1 8.8 6.8 El Salvador 6.5 1.7 6.4 20.3 21.8 2.9 -24.6 0.1 -1.7 4.6 -1.1 -5.2 8.3 5.4 1.8 Guatemala 29.4 16.0 21.6 17.4 2.8 4.5 13.6 5.2 -3.7 2.4 -8.1 -7.6 8.0 8.1 5.5 Honduras 22.7 10.8 5.3 15.1 9.1 2.9 3.9 -4.4 -8.0 -1.7 -2.9 -6.6 0.7 4.4 1.5 Nicaragua 50.4 23.0 6.3 7.2 31.0 11.9 18.5 13.0 5.0 2.1 11.5 6.9 27.8 12.2 13.2 Panama 16.0 -0.7 -30.0 -14.2 -16.5 -4.4 -28.4 -22.2 47.6 13.4 6.4 -0.5 11.3 3.3 -4.1 Caribbean countries 30.7 43.1 39.7 43.0 44.8 30.0 23.2 35.7 14.8 10.7 15.4 6.4 37.2 -4.0 27.5 Bahamas 34.7 1.0 45.6 98.3 82.4 80.2 -21.6 -4.8 -14.7 -54.0 -13.9 -15.6 -9.3 46.5 3.2 Barbados -16.2 -7.4 0.0 -23.7 59.7 43.9 323.3 -16.4 8.7 -8.2 -57.6 20.2 44.8 -13.4 25.6 Belize 18.3 25.0 63.0 59.3 -21.3 -34.3 -10.8 106.7 54.0 69.9 52.9 51.9 6.9 -20.1 30.3 Guyana -36.8 -17.0 -4.8 -6.9 -6.3 27.8 17.2 12.1 -10.1 -11.0 -57.8 -15.3 1.9 -17.7 -8.4 Haiti 51.2 15.4 54.4 25.4 39.4 21.1 33.8 32.6 29.0 16.5 51.8 50.3 6.2 -3.1 30.3 Jamaica -7.3 41.1 -5.9 -2.2 25.5 -11.5 -4.1 38.3 -26.5 12.5 25.7 -9.4 -6.7 -15.1 5.1 Dominican Republic 12.5 16.4 7.3 16.3 15.3 5.9 6.0 4.9 -2.5 2.1 8.2 -6.3 15.1 -0.3 6.9 Suriname -2.1 15.0 -40.5 -23.0 112.3 -35.1 8.0 -0.9 83.3 68.6 -6.7 42.7 -42.3 -7.0 5.4 Trinidad and Tobago 76.2 142.1 122.2 126.9 113.8 55.7 59.0 123.7 68.6 53.1 40.0 18.7 91.4 2.4 76.4
Others 76.3 8.1 59.9 23.5 36.3 84.4 36.9 -1.4 -27.7 -16.6 -7.1 14.0 57.7 -24.9 22.0
Table I.4
EUROPEAN UNION: GROWTH OF IMPORTS FROM LATIN AMERICA AND THE CARIBBEAN, OCTOBER 2002-SEPTEMBER 2003
(Monthly and accumulated growth rates January-September)
2002 2003 Jan.-Sept.
Subregions/countries
Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. 2002 2003
Latin America and
the Caribbean 5.8 -2.9 34.9 13.5 8.6 6.0 9.1 24.8 4.1 15.0 8.7 18.0 6.5 11.9 MERCOSUR 19.0 0.5 36.7 28.4 17.4 11.0 15.1 18.1 22.7 21.2 8.1 20.5 0.2 18.0 Argentina 13.8 -3.1 29.8 5.0 32.3 2.1 21.3 -0.4 4.1 8.7 7.8 22.5 18.5 10.7 Brazil 21.0 1.3 38.5 38.3 14.0 15.1 12.7 24.5 28.3 23.6 6.9 16.9 -5.1 19.8 Uruguay 39.9 31.3 54.2 -1.8 -14.1 -0.6 22.5 -5.9 43.8 42.6 47.4 58.1 21.9 21.9 Paraguay -27.4 -24.8 30.7 15.6 -40.1 -2.1 10.2 308.1 130.3 123.7 28.0 201.0 -38.2 93.2 Chile 3.9 11.2 14.4 2.4 0.4 28.6 -6.0 36.2 37.2 3.6 13.0 39.7 -2.4 16.6 Andean Community 1.6 20.5 17.0 -7.0 -18.1 -7.0 28.9 17.0 -3.8 -3.5 29.6 21.9 4.3 5.3 Bolivia -47.1 27.6 14.8 -22.5 5.3 -18.9 5.4 -3.1 23.8 -26.3 -21.1 -26.4 -44.5 -10.8 Colombia 18.8 14.8 24.7 16.3 -0.8 5.2 19.0 33.2 0.7 -6.8 60.1 28.5 -3.9 14.7 Ecuador 19.3 0.0 68.9 3.9 36.4 41.1 28.8 28.8 32.5 42.0 12.2 31.9 17.7 28.8 Peru 6.6 89.9 24.8 35.1 40.8 -4.2 19.2 29.8 28.4 -3.2 57.3 10.3 13.0 22.7 Venezuela -13.5 -18.4 -12.2 -66.3 -79.9 -40.6 48.7 -12.6 -42.8 -15.5 -10.2 26.0 3.8 -25.1 Mexico 3.2 -6.9 24.1 15.6 51.2 26.0 42.4 10.5 8.9 5.9 17.4 11.5 -15.6 19.4 CACM 23.8 25.7 51.6 15.0 51.6 14.6 7.4 35.9 -2.4 9.6 73.8 15.9 2.0 20.9 Costa Rica 41.7 40.4 54.6 7.0 70.8 18.1 5.6 31.3 -11.4 8.9 109.9 6.6 10.2 20.4 El Salvador 24.4 -40.0 62.0 55.0 16.0 -36.3 -12.8 94.9 122.7 -16.1 284.5 231.2 7.0 56.8 Guatemala 11.9 -5.1 20.0 25.5 24.5 5.2 28.9 25.6 14.6 24.7 -3.5 23.3 -24.1 18.4 Honduras -41.3 -13.9 65.3 83.3 -4.8 26.3 37.5 75.4 4.9 13.4 -21.9 -16.0 -7.2 18.9 Nicaragua -23.5 3.2 28.5 13.6 -3.3 14.8 -39.0 -34.9 -10.0 23.6 16.9 24.7 -33.9 -4.3 Panama -33.4 -33.8 26.4 24.3 97.3 -13.8 6.9 84.0 -63.4 123.5 -70.8 -55.5 7.9 -9.1 Caribbean countries -11.2 -28.6 56.4 6.0 -10.7 -11.9 -17.9 48.4 -17.8 22.8 -13.4 10.9 0.1 -0.4 Bahamas -22.4 -60.8 -23.3 45.2 -20.8 -24.6 -73.4 155.6 8.3 6.5 10.2 -6.1 41.1 7.1 Barbados -76.8 -17.5 52.2 -20.9 -38.2 -31.2 -52.3 11.9 113.9 5.0 -32.6 30.2 -24.3 -0.3 Belize 12.6 49.0 717.0 621.2 -31.6 693.9 211.1 58.4 -27.5 134.3 54.2 -40.5 -21.9 63.4 Guyana 37.6 55.3 -6.7 55.1 182.4 38.1 -10.7 64.4 160.7 -23.1 21.9 218.0 -18.6 40.1 Haiti 11.0 -30.6 1.3 -2.7 -19.2 24.8 49.2 92.4 8.8 -3.9 -3.5 71.2 -24.3 19.6 Jamaica -12.5 23.6 40.2 85.7 -23.8 -10.1 -0.4 53.3 -22.6 9.4 18.4 40.6 -12.0 10.9 Dominican Republic 59.4 -6.6 70.4 47.1 40.9 66.1 18.4 -9.1 24.6 16.4 -19.5 24.4 10.6 18.6 Suriname -40.0 51.3 72.1 6.9 85.2 10.5 35.4 586.3 53.8 496.7 -37.5 83.4 -30.5 55.8 Trinidad and Tobago 20.1 -4.3 37.7 0.4 43.2 14.9 63.2 10.8 26.8 -22.0 28.6 -9.0 6.1 17.4
Others -16.4 -36.9 112.3 -16.7 -21.9 -24.6 -26.9 41.3 -26.5 30.4 -25.9 7.0 -0.9 -10.2
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of data from EUROSTAT, “Intra and Extra EU Trade.
Table I.5
PRICES OF PRINCIPAL COMMODITIES EXPORTED BY LATIN AMERICAN AND CARIBBEAN COUNTRIES, 1995-2003
(Indices (1995=100), in dollars and percentages)
Product/Year Unit 1995 1998 2000 2001 2002 2003a Last price
(Dec. 2003) Agricultural products Rice Ton 100.0 95.0 63.4 53.4 59.6 61.4 198.30 Sugar Pound 100.0 67.7 61.7 64.7 51.9 53.4 0.06 Banana Pound 100.0 108.5 95.5 132.7 121.1 85.4 0.17 Meat Pound 100.0 90.5 101.5 111.7 111.4 111.9 1.05 Shrimp Pound 100.0 113.6 116.9 115.3 89.8 88.1 0.05 Wheat Ton 100.0 72.1 66.6 72.6 84.8 84.1 170.00 Corn Ton 100.0 80.8 75.7 78.8 86.7 87.3 130.00 Soybean Ton 100.0 93.6 81.7 75.5 82.0 99.4 327.00
Soybean oil Ton 100.0 100.2 54.1 56.6 72.7 88.6 638.00
Soy meal Ton 100.0 89.9 94.8 93.9 90.7 106.6 277.00
Colombian coffee Pound 100.0 90.2 64.8 45.6 41.2 42.5 0.69
Brazilian coffee Pound 100.0 68.0 44.6 28.2 25.1 28.4 0.57
Cocoa Pound 100.0 117.2 62.0 76.0 124.2 122.5 0.74
Cotton Pound 100.0 62.5 56.7 45.9 44.3 60.7 0.74
Cowhides Kilogram 100.0 47.3 59.5 84.2 82.2 68.6 0.81
Fishmeal Ton 100.0 133.7 83.4 98.3 122.7 123.4 656.00
Wool Pound 100.0 79.5 98.3 76.5 95.4 118.2 219.90
Wood pulp Ton 100.0 50.9 77.3 52.4 48.5 53.0 448.00
Tobacco Ton 100.0 126.2 113.1 113.1 103.5 100.0 2 643.30 Minerals Aluminium Pound 100.0 75.2 85.8 80.0 74.7 79.2 0.71 Copper Pound 100.0 56.3 61.8 53.8 53.1 60.6 1.00 Tin Pound 100.0 89.1 87.5 72.1 65.3 78.7 2.75 Iron Pound 100.0 110.0 102.6 107.0 105.9 114.8 0.31 Nickel Pound 100.0 56.3 105.0 72.2 82.3 112.0 5.48 Lead Pound 100.0 83.9 72.0 75.5 71.7 81.8 0.31 Zinc Pound 100.0 99.4 109.4 85.9 75.4 80.3 0.44 Gold Ounce 100.0 76.6 72.6 70.5 80.7 94.6 407.00 Silver Ounce 100.0 106.5 96.3 84.5 89.2 94.6 5.65 Petroleum Barrel 100.0 77.5 166.9 145.0 147.5 171.1 30.07 Compound indices
Latin American products ... 100.0 82.5 114.9 97.1 100.5 116.0
Agricultural products … 100.0 88.8 77.4 77.7 80.9 83.3
Mining productsb … 100.0 83.7 88.1 78.0 77.6 88.5
Mining productsc … 100.0 83.1 96.0 84.7 84.6 96.8
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of information from the United Nations Conference on
Trade and Development (UNCTAD), Monthly Commodity Price Bulletin, Geneva, December 2003; World Bank, Global Commodity Markets, Washington, D.C., January 2004; World Bank, Commodity Prices Data Pinksheet, Washington, D.C., December 2003.
aIndex based on the average value January-December for 2003. bArithmetic mean excluding petroleum.
Box I.2
RISE IN PRICES OF LATIN AMERICAN COMMODITIES HOW LONG WILL THE CYCLE LAST?
Unexpectedly high rises in Latin American commodity prices since the end of 2002 and throughout 2003 contributed to a recovery in Latin American exports. The industrial commodity price index of the review The Economist recorded rises of close to 25% up to September. The main Latin American commodities experienced price rises of the order of 7% and 15%, depending on whether or not oil prices are included. For the set of countries in the region, the highest rises occurred in 2003: petroleum and petroleum-based products: 22%; oils, meals and seeds: 20%; mineral and metal products: 12%; and beverages: 5%. These four groups of products account for 41%, 25%, 8% and 7%, respectively, of the regional export basket.
The export value of primary products improved in all of these countries, except in Venezuela and Bolivia, where short-term conditions prevailed. Argentina, Brazil and Uruguay expanded their agricultural exports aided especially by the rise in the prices of soybean and soy products (oils and meals). Coffee exports from Colombia, Brazil and the Central American countries increased following the rise in prices which was in excess of 16% and 30%,
depending on the variety of the bean (robust, arabica or others); Paraguay benefited from the rise in cotton prices (37%) and wool (24%). For
their part, Peru and Chile were favoured by the impressive rise in the price of copper, which at the end of February was over US$ 1.33 per pound, one of the highest levels in the last three years.
For the Central American and Caribbean countries, the greatest stimulus came from the recovery in the price of sugar, the main product in its export basket. Other countries that received a boost from the rise in prices were Colombia, Ecuador, Mexico, Trinidad and Tobago and Belize, where high oil prices –10% more than in 2002– led to growth rates of over 20% in the mining and oil sectors (see table I.18).
The price rises, especially in Latin America, were due, inter alia, to the following factors: (a) the devaluation of the dollar, which spurred investment in futures in raw material stock
exchanges, including copper, nickel and gold exchanges; (b) the expansion of new purchase markets, such as China, India and Russia, which, given their importance in the world economy, pushed prices up; (c) persistent geopolitical tensions in the middle east, which kept oil prices high; (d) the reduction in stocks in some major markets such as soybean, cotton and copper (for example, Indonesia closed one of its main copper mines); and (e) the renewed appeal of raw material investment funds, which had become low-risk diversification points under
hedging operations or positioning in alternative assets.
While the dollar continues to depreciate, expectations from raw material prices will continue to be positive. However, there is no empirical evidence that can determine up to what point the upward trend will last. The only thing that economists are sure about is that there is no long-term or continuous trend towards a worsening in the terms of trade, although they recognize that relative raw material prices deteriorated substantially over a long period, especially in the case of products as diverse as cotton, aluminium, rice, sugar, banana, cocoa, rubber, leather, wood, silver and wheat, with annual variations of 1% or more and cumulative falls of 60% on average (Ocampo and Parra, 2003).
Prebisch and Singer’s hypothesis that relative raw material prices would trend downwards over time owing to low income elasticity of demand of these products implies that raw material exports would be completely unfavourable as a trade specialization pattern. However, the recent expansion in trade in this very segment of exportable production in the developing world seems to contradict this
hypothesis. Nevertheless, the weakness of the factors that determined the upward trend in raw material prices makes it doubtful that this trend will persist at such a strong pace for much longer.
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of José Antonio Ocampo and María Angela Parra,
“The terms of trade for commodities in the twentieth century”, CEPAL Review, No. 79 (LC/G.2200-P), Santiago, Chile, April 2003; Financial Times, 29 September 2003.