Growth in global trade will slow to 7 per cent in 2001 from last year's 12 per cent when growth showed the strongest surge in more than a decade, according to the World Trade Organisation's (WTO) annual report.
The report said slowingeconomic growth beginning in the final quarter of 2000 has clouded trade prospects for this year.
But it said economic activity and trade growth in western Europe posed a major uncertainty in the outlook for world trade.
"As western Europe accounts for about 40 per cent of world trade, a stronger resistance to the US slowdown than is projected could mean that world trade would expand in 2001 by more than the 7 per cent currently forecast," the report said.
"Downward risks are primarily seen in the repercussions of severe stock market corrections on investment and consumer expenditure in advanced economies," it said.
In 2000 developing countries' trade grew by more than 20 per cent, lifting their share in the merchandise sector to the highest level in 50 years, due to the economic recovery in Latin America and East Asia, the sharp rise of oil prices and stronger import demand.
AFP