Global trade growing at fastest rate since 2003

GLOBAL TRADE rose at its fastest rate in more than five years in July, suggesting the economic recovery is feeding into commerce.

An index compiled by the Bureau for Economic Policy Analysis, a Dutch research institute, showed the volume of world trade rising 3.5 per cent in July after a revised increase of 1.6 per cent in June.

The rise in volumes was the steepest since December 2003.

The numbers suggest the fall in trade over the past year, steeper than during the 1930s, was mainly caused by lack of demand rather than a breakdown in the trading system.

The monthly data is volatile, but the three-month average figures also showed a sharp recovery, with volumes increasing for the first time since the three months to May 2008.

Earlier this year the three-month average dropped more than 12 per cent.

“The fact that global supply chains are getting back to normal is good news for export-dependent countries like Japan and Germany,” Julian Jessop, chief international economist at Capital Economics, said.

“It shows that the fall in trade was primarily a demand effect.” Tensions have risen, however, as the recession has intensified. The European Union yesterday imposed anti-dumping duties of almost 40 per cent on imports of steel pipe from China.

The decision, which followed a preliminary ruling earlier in the year, broke ground by imposing tariffs based only on the threat of damage to European groups from low-priced imports rather than requiring them to show actual lost sales. – (Copyright The Financial Times Limited 2009)