APRIL TRADE WATCH 74203 APRIL TRADE UPDATE – BAD, BUT NOT WORSE  January and February trade data show a sharp drop in exports and imports across nearly all countries. Early data from March indicate no improvement.  The weakening of the U.S. Dollar against mayor currencies in the pre crisis period followed by a strengthening overstates to some degree the trade slowdown.  U.S. and Japanese import data, available by sector, show a widespread collapse across broad sectors, with food products being the least damaged and mineral products and heavy materials, such as transportation and metals, the most affected.  Oil related products and motor vehicles and parts present particularly sharp drops.  One important bright spot is cell phones. Imports are up 24 percent in the United States and 12 percent in Japan. Trade plummets in the New Year. Fifty-five countries have reported trade data for February. Trade growth is uniformly negative, with both exports and imports down over 30 percent on average, compared to the same month last year (See Tables 1 and 2). While trade is severely depressed, there is little overall change since February, suggesting that conditions did not deteriorate significantly from the previous month. Early March trade data for ten countries show no improvement. To see the declines in context, Figures 1 and 2 show export and import growth by region through February 2009, for a balanced sample of countries reporting data. Figures 3 and 4 show the same indices by income group. Trade growth relative to the same month of the previous year averaged above 20 percent until September. While part of the decline reflects the steep fall in commodity prices, the slowdown is relatively widespread, across regions, between developed and developing countries as well as across exports and imports, suggesting that reduced demand is the primary cause. In addition to the falling commodity prices, exchange rate fluctuations play an important role in the magnitude of the trade decline.1 Figure 5 shows a period of weakening of the U.S. Dollar against the Japanese Yen and Euro, followed by a period of strengthening against the British Pound and Euro. These exchange rate movements overstate the drop in trade. To mitigate this “exchange rate effect�, we also report trade flows using a standard basket of currencies (S.D.R.). 2 Figure 6 and 7 show that the slump in trade growth, from 1 When the U.S. Dollar depreciates trade growth rates, measured in dollars, are higher, reversely, when the U.S. Dollar appreciates growth rates, are lower (ceteris paribus). In other words, when the U.S. Dollar weakens a product is more expensive in U.S. Dollars inducing a higher growth rate. 2 The Special Drawing Right (S.D.R.) was created by the I.M.F. in 1969 to support the Bretton Woods fixed exchange rate system. Today the S.D.R. is defined as a basket of currencies, consisting of the Euro, APRIL TRADE WATCH the first six months of the year, is nearly 20 percent (or about 10 percentage points) smaller both for imports and for exports, using the more comprehensive S.D.R. as unit of value. U.S. and Japanese data, available by industry, provide an indication of where trade is declining the fastest. Table 3 and Figure 5 show U.S. imports by broad sector, the same data for Japan is shown in Table 4 and Figure 6. All sectors now record declines. Both countries report especially sharp drops in mineral products, partly due to the sharp fall in prices. Transportation, metals, and stone and glass have also been heavily hit as demand and investment plummet. Food products (animals, vegetables, and foodstuffs) have been relatively less damaged by the crisis. Looking at data at the HS 6-digit level (more than 5000 products), over 75 percent of products in both countries declined relative to the same month of the previous year. Items such as oil related products (mostly because of falling oil prices) and motor vehicles and parts present particularly sharp drops. Still, there are a few bright spots:  Cell phone imports are up 24 percent in the US and 12 percent in Japan.  Medical equipment trade is thriving (such as catheters, pacemakers and MRI equipment).  Various foods items are up (bananas and meat in both nations, grains and rice in Japan).  A number of chemical imports increased in both countries (e.g. Heterocyclic comps, a sizable item in trade, are up 48 percent in the US and 67 percent in Japan).  Tobacco imports rose over 100 percent in the US and 30 percent in Japan. This note was prepared by Caroline Freund (DECRG) and Matias David Horenstein (DECRG) with support from PRMTR and the multi-donor trust fund. If you wish to receive a monthly Trade Watch, email mhorenstein@worldbank.org with “Trade Watch� in the subject. Japanese Yen, British Pound and U.S. Dollar. The U.S. Dollar value of the S.D.R. is posted daily at the IMF website. APRIL TRADE WATCH Table 1: Export Growth Relative to Same Month Previous Year (Percentage Change in U.S. Dollars) Exports Country September October November December January February March Argentina 44.90 13.36 -5.78 -24.01 -35.80 -24.44 n.a. Australia 51.33 33.78 14.18 4.33 -3.76 1.43 n.a. Austria 12.11 -8.15 -25.69 -13.84 -34.21 n.a. n.a. Bangladesh 12.62 31.46 4.90 3.19 n.a. n.a. n.a. Belgium 11.07 -5.63 -26.80 -13.50 -29.56 n.a. n.a. Bulgaria 19.68 -5.86 -26.44 -19.31 -36.41 -35.93 n.a. Canada 14.02 -1.25 -16.35 -16.13 -36.31 -33.99 n.a. Chile -12.69 -22.73 -27.62 -26.81 -41.43 -42.19 -44.48 China 21.50 19.20 -2.20 -2.80 -17.50 -25.70 -17.10 Croatia 21.14 -16.09 -11.27 -9.12 -35.11 -17.44 n.a. Cyprus 11.04 -13.33 8.40 10.43 -32.68 -29.16 n.a. Czech Republic 21.45 -4.73 -25.20 -16.14 -36.66 -39.81 n.a. Denmark 16.50 -2.26 -26.86 -7.37 -27.83 -31.13 n.a. Ecuador 19.58 -11.08 -23.93 -38.52 -45.42 -51.98 n.a. Egypt 65.12 38.29 -4.46 n.a. -9.67 -7.86 n.a. Estonia 27.96 7.48 -27.38 -11.45 -37.34 n.a. n.a. Finland 7.43 -4.41 -30.55 -20.17 -43.76 -43.83 n.a. France 9.79 -8.94 -23.91 -7.78 -32.24 -32.69 n.a. Germany 9.25 -3.49 -23.86 -12.79 -32.44 -32.38 n.a. Greece 6.40 5.74 -27.87 n.a. -31.39 -24.27 n.a. Hong Kong 3.50 9.36 -4.83 -10.82 -21.42 -22.56 n.a. Hungary 11.94 -12.48 -22.97 -22.11 -40.13 -37.65 n.a. Iceland 69.46 -22.90 -46.29 16.20 -31.09 -2.12 -36.12 India 12.56 -13.23 -20.30 -4.35 -16.46 -20.34 n.a. Indonesia 29.02 4.72 -1.81 -20.56 -36.08 -32.86 n.a. Ireland 3.21 -7.47 -19.82 4.04 -13.35 n.a. n.a. Israel 28.79 -19.20 -17.12 -19.63 -30.77 -34.98 -29.02 Italy 9.98 -5.08 -26.66 -10.06 -34.76 -34.30 n.a. Japan 9.87 6.77 -16.10 -18.59 -35.33 -40.83 -44.35 Jordan n.a. n.a. n.a. n.a. n.a. n.a. n.a. Kazakhstan 47.93 52.26 -2.29 -18.21 -50.53 -46.31 n.a. Korea, Republic of 27.64 7.78 -19.45 -17.90 -34.20 -18.51 -22.02 Latvia 32.07 6.20 -19.01 -12.66 -28.84 -33.77 n.a. Lithuania 44.09 18.62 1.99 -8.28 -25.91 -35.93 n.a. Luxembourg 18.60 -2.68 -27.59 -18.85 -35.29 n.a. n.a. Malaysia 15.95 -6.59 -10.83 -20.76 -34.56 -24.85 n.a. Malta 1.76 -6.52 -35.03 -36.27 -44.49 -44.40 n.a. Mexico 8.40 -6.36 -16.67 -19.68 -31.50 -29.46 n.a. Netherlands 14.30 -1.27 -24.54 -13.64 -30.57 -30.72 n.a. New Zealand 0.44 -8.58 -19.03 -24.80 -30.20 -37.44 n.a. Norway 13.63 -8.86 -21.35 -31.01 -34.78 -34.31 -34.05 Pakistan 20.77 9.86 -0.78 -3.05 -7.79 -17.37 -25.93 Peru 8.09 -8.69 -11.58 -32.97 -37.08 -27.37 n.a. Philippines 1.12 -14.78 -11.40 -40.32 -40.64 -39.11 n.a. Poland 24.46 -2.13 -23.94 -23.48 -37.38 -37.48 n.a. Portugal 6.83 -9.36 -25.71 -18.84 -37.22 n.a. n.a. Romania 21.28 9.04 -20.59 -20.05 -33.12 -36.49 n.a. Russian Federation 53.71 12.45 -16.08 -25.84 -47.91 -47.51 n.a. Singapore 17.99 -4.63 -15.93 -21.80 -40.75 -28.55 -28.95 Slovakia 10.50 -5.15 -26.72 -23.36 -41.31 -39.31 n.a. Slovenia 14.22 -4.64 -25.20 -19.04 -34.54 -34.20 n.a. South Africa 35.67 13.87 -25.98 -23.71 -38.50 -27.99 n.a. Spain 18.71 -4.72 -25.25 -12.32 -34.65 -34.43 n.a. Sri Lanka -9.55 1.98 11.57 -20.57 -12.04 n.a. n.a. Sweden 10.64 -10.61 -31.03 -25.86 -42.72 -42.33 n.a. Switzerland 18.17 4.69 -14.10 -2.36 -15.06 -22.55 n.a. -2.34 Taiwan, Province of China -9.29 -23.46 -41.59 -44.85 -29.69 -35.73 Thailand 22.65 5.23 -18.60 -12.43 -26.47 -11.35 n.a. Turkey 41.51 -1.81 -17.11 -20.71 -25.95 -24.90 n.a. Ukraine 62.47 34.89 -18.60 -17.56 -33.28 -42.62 n.a. United Kingdom 9.08 -4.70 -30.71 -18.52 -33.69 -36.09 n.a. United States 9.11 4.50 -5.66 -11.75 -21.13 -23.84 n.a. Uruguay 10.96 39.11 2.73 -10.06 -7.41 n.a. n.a. Venezuela -84.17 -87.47 -81.62 n.a. n.a. n.a. n.a. Viet Nam 28.63 20.10 -6.24 4.26 -17.36 32.32 n.a. Average 19.35 1.31 -17.30 -16.27 -31.69 -29.70 -31.77 Balanced Average 21.00 1.01 -17.50 -16.76 -32.30 -29.70 - Source: Datastream. Note: Data reporter in national currency are converted to U.S. dollars using average monthly nominal exchange rates. n.a. indicates not available APRIL TRADE WATCH Table 2: Import Growth Relative to Same Month Previous Year (Percentage Change in U.S. Dollars) Imports Country September October November December January February March Argentina 34.01 16.59 -5.41 -10.87 -38.39 -36.72 n.a. Australia 29.45 -4.85 -11.47 -0.18 -25.11 -27.18 -27.33 Austria 7.64 -2.14 -19.81 -10.43 -27.57 n.a. n.a. Bangladesh 31.52 26.67 9.04 -1.25 n.a. n.a. n.a. Belgium 17.49 -3.78 -23.47 -12.90 -33.65 n.a. n.a. Bulgaria 18.81 7.05 -23.40 -21.18 -41.07 -39.89 n.a. Canada 11.25 -3.13 -15.31 -10.17 -27.13 -26.30 n.a. Chile 47.37 21.96 -14.56 -4.40 -25.50 -32.64 -33.10 China 21.30 15.60 -17.90 -21.30 -43.10 -24.10 -25.10 Croatia 31.24 -5.04 -17.11 -6.79 -40.11 -34.69 n.a. Cyprus 25.43 -0.49 -12.35 -7.92 -32.06 -29.51 n.a. Czech Republic 23.61 0.69 -20.77 -12.14 -34.39 -39.26 n.a. Denmark 17.72 -1.97 -21.56 -6.82 -20.52 -25.48 n.a. Ecuador 54.92 38.33 13.99 22.83 7.03 -4.71 n.a. Egypt 112.32 96.81 57.03 n.a. 36.76 31.66 n.a. Estonia 7.34 -7.10 -29.40 -19.52 -43.96 n.a. n.a. Finland 21.72 -6.53 -24.08 -19.85 -40.94 -39.20 n.a. France 14.79 -2.04 -20.65 -11.45 -30.80 -28.35 n.a. Germany 16.14 -0.19 -14.73 -9.17 -24.13 -26.51 n.a. Greece 6.85 -6.72 -25.18 -15.31 -38.23 -38.13 n.a. Hong Kong 3.79 11.20 -7.52 -15.67 -26.72 -17.01 n.a. Hungary 14.13 -10.04 -22.67 -22.42 -38.61 -39.95 n.a. Iceland -0.87 -52.15 -45.17 -52.28 -50.15 -51.46 n.a. India 54.07 7.25 -1.72 0.00 -18.78 -18.24 n.a. Indonesia 66.34 70.74 19.90 12.61 -31.30 -40.92 n.a. Ireland -4.98 -21.60 -37.19 -23.12 -36.30 n.a. n.a. Israel 28.46 -6.02 -6.47 -27.48 -33.93 -35.08 -37.43 Italy 13.08 -3.68 -24.71 -14.97 -33.16 -32.92 n.a. Japan 39.43 24.51 -1.93 -1.70 -18.90 -33.25 -35.26 Jordan 22.53 5.84 -6.73 -20.02 -14.96 n.a. n.a. Kazakhstan 20.13 4.49 0.29 21.52 -21.37 -13.36 n.a. Korea, Republic of 45.36 10.25 -14.95 -21.60 -32.10 -30.87 n.a. Latvia 16.67 -6.05 -24.43 -17.05 -39.13 -43.45 n.a. Lithuania 29.96 5.24 -19.14 -13.64 -47.43 -48.86 n.a. Luxembourg 24.00 3.06 -10.45 -12.90 -26.32 n.a. n.a. Malaysia 12.31 -9.16 -14.28 -28.11 -38.34 -35.00 n.a. Malta 20.03 -28.14 -27.51 -14.46 -26.12 -36.98 n.a. Mexico 17.84 0.26 -7.63 -12.79 -30.04 -30.72 n.a. Netherlands 19.74 1.26 -19.80 -10.52 -31.17 -31.37 n.a. New Zealand 17.21 -6.35 -20.75 -17.24 -34.50 -42.53 n.a. Norway 23.54 -20.98 -24.33 -14.33 -34.30 -37.32 -24.36 Pakistan 40.24 2.09 -13.85 -10.73 -28.32 -41.73 -38.42 Peru 60.49 32.78 14.90 6.36 -19.01 -18.66 n.a. Philippines 2.52 -11.13 -31.52 -33.99 -34.51 n.a. n.a. Poland 26.25 2.64 -19.90 -20.64 -38.91 -41.43 n.a. Portugal 11.48 -4.00 -22.59 -14.23 -35.39 n.a. n.a. Romania 31.49 1.13 -27.27 -27.81 -44.03 -43.79 n.a. Russian Federation 44.83 23.48 -3.11 -3.32 -34.07 -36.47 n.a. Singapore 33.65 3.86 -13.46 -18.20 -36.50 -25.35 -35.62 Slovakia 13.70 -6.05 -25.60 -22.63 -37.17 -40.88 n.a. Slovenia 13.13 -0.02 -24.10 -16.25 -39.67 -37.68 n.a. South Africa 32.47 -8.42 -17.65 -23.27 -27.64 -35.10 n.a. Spain 8.50 -14.43 -30.58 -20.90 -43.06 -34.98 n.a. Sri Lanka 22.44 8.77 -3.16 -11.33 -40.86 n.a. n.a. Sweden 7.45 -9.31 -28.74 -24.78 -42.05 -40.44 n.a. Switzerland 19.25 -0.83 -17.99 -4.79 -20.19 -18.41 n.a. Taiwan, Province of China 9.13 -8.42 -13.83 -44.33 -57.04 -32.69 -49.55 Thailand 39.35 21.68 2.01 -6.49 -37.60 -40.33 n.a. Turkey 23.69 -4.38 -27.42 -29.25 -43.26 -47.60 n.a. Ukraine 74.76 30.22 -9.58 -27.93 -45.74 -33.40 n.a. United Kingdom -0.57 -10.50 -29.45 -22.22 -32.64 -36.92 n.a. United States 11.59 2.61 -16.01 -14.57 -26.59 -34.14 n.a. Uruguay 44.17 78.51 -3.88 29.56 -33.20 -7.80 n.a. Venezuela 12.31 5.42 6.88 18.04 14.53 -13.09 n.a. Viet Nam 8.06 8.69 -19.11 -14.29 -55.21 -27.79 -38.57 Average 24.99 4.68 -14.30 -13.17 -31.63 -31.44 -34.47 Balanced Average 26.44 5.34 -13.90 -13.17 -31.24 -31.44 - Source: Datastream. Note: Data reporter in national currency are converted to U.S. dollars using average monthly nominal exchange rates. n.a. indicates not available APRIL TRADE WATCH Table 3: U.S. Import Growth by Industry Industry September October November December January February Animal & Animal Products 7.45 -2.47 -4.10 0.74 -7.87 -13.10 Vegetable Products 24.27 18.62 6.55 11.36 -1.22 -7.99 Foodstuffs 19.77 7.93 -3.15 4.60 -6.04 -9.44 Mineral Products 34.23 25.41 -27.92 -35.19 -49.94 -53.56 Chemicals & Allied Industries 26.31 14.02 -3.27 13.37 -11.17 -19.20 Plastics / Rubbers 13.82 7.67 -1.03 -6.02 -14.25 -30.92 Raw Hides, Raw Hides, Leather & Furs 8.20 -1.07 -9.53 -4.85 -3.62 -25.96 Wood & Wood Products -5.31 -9.81 -15.53 -16.76 -25.69 -27.68 Textiles 2.27 -0.14 -10.17 -4.30 -9.11 -18.85 Footwear / Headgear 7.84 7.77 -3.20 0.34 7.54 -18.77 Stone / Glass 8.65 -14.91 -24.12 -20.18 -34.54 -41.53 Metals 25.51 15.33 1.20 -5.99 -12.98 -33.75 Machinery / Electrical 4.99 -3.88 -15.74 -12.60 -19.14 -26.25 Transportation -10.98 -22.03 -26.61 -21.29 -43.04 -51.74 Miscellaneous 4.76 -1.79 -11.29 -5.91 -14.23 -26.28 Other 6.50 7.06 -3.67 -1.74 -11.12 -6.00 Total 11.86 2.79 -15.98 -14.49 -26.63 -34.23 Source: U.S.I.T.C. and authors' calculations. Table 4: Japan’s Import Growth by Industry Industry September October November December January February Animal & Animal Products 12.04 7.08 -7.73 -7.05 -9.00 -15.66 Vegetable Products 49.33 25.33 -5.71 -8.01 -25.68 -32.73 Foodstuffs 9.44 -2.34 -16.58 -3.38 -6.43 -18.17 Mineral Products 62.17 29.96 -12.55 -29.80 -42.38 -50.80 Chemicals & Allied Industries 24.09 3.96 -5.29 -3.96 -15.08 -27.65 Plastics / Rubbers 26.07 7.87 -0.53 -3.89 -18.11 -42.32 Raw Hides, Raw Hides, Leather & Furs 0.90 -14.41 -22.48 -16.52 -7.29 -33.25 Wood & Wood Products 13.93 2.54 -8.46 -7.73 -12.67 -20.36 Textiles 11.67 -1.69 -9.36 -1.96 3.29 -31.44 Footwear / Headgear 15.69 -0.09 -5.58 -2.21 -0.19 -24.21 Stone / Glass 16.77 4.36 -23.65 -38.91 -37.92 -58.48 Metals 13.81 5.16 -15.04 -22.78 -35.86 -56.40 Machinery / Electrical 5.78 -8.64 -20.37 -24.95 -34.56 -42.40 Transportation 3.73 -34.99 -36.25 -25.05 -49.08 -46.36 Miscellaneous 7.93 -7.26 -19.98 -16.21 -30.70 -35.97 Total 28.98 7.85 -14.80 -21.74 -31.92 -43.00 Source: Ministry of Finance, Japan, and authors' calculations. APRIL TRADE WATCH Figure 1: Export Growth by Region Figure 2: Import Growth by Region 60 60 40 40 20 20 0 0 jan feb mar apr may jun jul aug sep oct nov dec jan feb jan feb mar apr may jun jul aug sep oct nov dec jan feb -20 -20 -40 -40 EAP ECA LAC MENA NOA SAS SSA EAP ECA LAC MENA NOA SAS SSA Source: Datastream, U.S. Commerce Department Source: Datastream, U.S. Commerce Department and authors’ calculations. Simple average of and authors’ calculations. Simple average of growth rates across economies within regions for a growth rates across economies within regions for a balanced sample of 52 economies reporting data. balanced sample of 54 economies reporting data Figure 3: Export Growth by Income Group Figure 4: Import Growth by Income Group 80 80 60 60 40 40 20 20 0 0 jan feb mar apr may jun jul aug sep oct nov dec jan feb jan feb mar apr may jun jul aug sep oct nov dec jan feb -20 -20 -40 -40 -60 -60 L ML UM H_OECD H_other L ML UM H_OECD H_other Source: Datastream, U.S. Commerce Department Source: Datastream, U.S. Commerce Department and authors’ calculations. Simple average of and authors’ calculations. Simple average of growth rates of economies in income groups for a growth rates of economies in income groups for a balanced sample of 52 economies reporting data. balanced sample of 54 economies reporting data. APRIL TRADE WATCH Figure 5: Normalized Exchange Rates 140 130 120 SDR 110 Euro Yen 100 Pound 90 80 70 1 3 5 7 9 1 3 5 7 9 1 3 11 11 M M M M M M M M M M M M M M 07 07 07 07 07 08 08 08 08 08 09 09 07 08 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Source: Datastream and authors’ calculations. U.S. Dollars per foreign currency Figure 6: Export Growth Figure 7: Import Growth 50 50 40 40 30 30 20 20 10 10 0 0 jan feb mar apr may jun jul aug sep oct nov dec jan feb jan feb mar apr may jun jul aug sep oct nov dec jan feb -10 -10 -20 -20 -30 -30 -40 -40 USD SDR USD SDR Source: Datastream, U.S. Commerce Department Source: Datastream, U.S. Commerce Department and and authors’ calculations. Simple average of authors’ calculations. Simple average of growth rates growth rates of economies for a balanced sample of of economies for a balanced sample of 54 economies 52 economies reporting data. reporting data. APRIL TRADE WATCH Figure 8: U.S. Import Growth by Industry 100 Animal & Animal Products 80 Vegetable Products Foodstuffs 60 Mineral Products Chemicals & Allied Industries 40 Plastics / Rubbers Raw Hides, Raw Hides, Leather & Furs 20 Wood & Wood Products Textiles 0 Footwear / Headgear Stone / Glass -20 Metals Machinery / Electrical -40 Transportation Miscellaneous -60 Other -80 jan feb mar apr may jun jul aug sep oct nov dec jan feb Source: USITC and authors’ calculations. Figure 9: Japan’s Import Growth by Industry 100 Animal & Animal Products 80 Vegetable Products Foodstuffs 60 Mineral Products Chemicals & Allied Industries 40 Plastics / Rubbers Raw Hides, Raw Hides, Leather & 20 Furs Wood & Wood Products Textiles 0 Footwear / Headgear Stone / Glass -20 Metals -40 Machinery / Electrical Transportation -60 Miscellaneous -80 jan feb mar apr may jun jul aug sep oct nov dec jan feb Source: Ministry of Finance, Japan.