Development and building trade capacity
Global growth, trade and poverty: The macro links
The relationship between economic growth poverty reduction and trade is not a simple one. Although great progress has been made in reducing the number of people living in extreme poverty due in large part to the rapidly growing participation of developing countries in the global economy nearly one billion people still live on less than $1.25 per day.
The Role of Trade in Ending Poverty
The Role of Trade in Ending Poverty looks at the complex relationships between economic growth poverty reduction and trade and examines the challenges that poor people face in benefiting from trade opportunities. Written jointly by the World Bank Group and the WTO the publication examines how trade could make a greater contribution to ending poverty by increasing efforts to lower trade costs improve the enabling environment implement trade policy in conjunction with other areas of policy better manage risks faced by the poor and improve data used for policy-making.
Training and Technical Assistance
Over 14700 participants from developing countries benefited from WTO training courses and distance learning programmes in 2014. This training has been instrumental in helping government officials gain a greater understanding of the multilateral trading system and in helping developing countries tackle the challenges of being a WTO member enforce their rights and meet their obligations.
Infrastructure Provision and Africa’s Trade and Development Prospects
Transitioning from the post-2008 financial meltdown to a sustained period of global growth and prosperity involves a major challenge: how to ensure the effective management of international economic interdependence. Trade growth good governance and sustainable development constitute essential ingredients to any solution as is a fairer distribution of the gains of trade. Two issues stand out in this conversation. The first concerns the unfinished business of the global fight against the scourge of poverty which impacts one region more than most: Africa. At the same time a key pre-requisite for economic performance - affordable and efficient public infrastructure and services – remains lacking in this region – notably in Sub-Saharan Africa. To address this the region itself has initiated a major long-term continent-wide infrastructure development programme which is intended to fix this problem sustainably - namely the Programme for Infrastructure Development in Africa (PIDA). Its success foreshadows an economic transformation that will potentially usher in an emergent Africa in the 21st century. Secondly in one area of economic activity – trade in government procurement markets - the revised WTO Agreement on Government Procurement (GPA) is emerging as a multi-dimensional tool of trade governance and development. The thesis of this paper is that GPA participation by African countries - a prospect which to date they have declined to take up - holds strong potential to reinforce the positive effects of PIDA and to contribute to the region's growth and development more generally. Developing this thesis the paper examines the possible application of the GPA to support Africa's infrastructure programme drawing on its three dimensions of instrument of governance market access instrument and 'policy space' instrument in support of the development financial and trade needs of developing countries. Based on the analysis the paper concludes that the potential benefits outweigh the potential costs of participation in the GPA by African countries and accordingly that the GPA merits consideration by the region in this regard. A successful implementation of the infrastructure programme also portends a significant expansion in the size of the African government procurement market. Were African countries to accede to the Agreement in this context it would constitute not only a big rise in membership numbers but also a significant expansion in the value of market access under the Agreement. The broad outlines of a potential win-win scenario for both African countries and GPA Parties thus begin to emerge. The paper nonetheless acknowledges that delivering these benefits would involve significant practical and political challenges. It concludes that if the challenges can be overcome and the mutual benefits delivered the revised GPA would have been demonstrated as an effective tool for balancing flexibility and reciprocity in the government procurement sector consistent with sustainable development principles with the capability to deliver win-win benefits for a broad range of stakeholders in the post-2015 era.
Achieving Bangladesh’s Tourism Potential
Bangladesh's international image is not as a popular tourism destination and many people might be surprised to learn it has three World Heritage sites including the Sundarbans tiger reserves. Moreover it is part of important travel circuits for cultural and religious tourism and has demonstrated potential for sports tourism. The objective of this working paper is to critically test the assertion that pro-poor "green" tourism is one of the best development options for the majority of least developed countries (LDCs) -- a challenging task in Bangladesh in the face of the country's success as an exporter of readymade garments -- by comparing tourism to the available alternatives with regard to the crucial government priorities of export diversification employment generation and the "green economy". It is well-known that Bangladesh is under strong pressure to diversify its exports to generate new employment (especially in rural areas) and to respond to critical environmental issues. The government has identified over 30 "thrust sectors" (including tourism) to help address these challenges but otherwise tourism is rarely mentioned as a major trade and development option for Bangladesh. Within the limitations of data availability this working paper reaches the conclusion that greater efforts to develop "green" tourism would be highly beneficial for facilitating rural development environmental and cultural protection gender equality and export diversification in services. The most obvious current impediments are inadequate infrastructure lack of investment and (typically election year) political conflict but behind these factors appear to be a serious lack of stakeholder coordination insufficient regulatory and administrative transparency and coherence as well as some government reluctance to relinquish greater commercial autonomy in tourism to the private sector. This paper offers extensive analysis and some suggestions to help address the impediments including the recommendation to create a Bangladesh Tourism Stakeholders Forum.
Executive Summary
The World Trade Report 2014 examines four trends that have characterized the last decade: (i) the rise of the developing world (ii) the expansion of global value chains (iii) the increase in prices of commodities and the growing importance of commodity exports and (iv) the increasingly global nature of macroeconomic shocks. In analysing these trends the report explores how they have reshaped the role that trade plays in facilitating development while highlighting remaining impediments for the expansion of global development. Building on this analysis the report illustrates how the WTO system’s features have helped underpin the recent development gains of many developing countries by allowing them to adapt to take advantage of and mitigate risks arising from the four trends.
The WTO and developing countries
This section discusses a number of the WTO’s features which help underpin development and explain their economic rationale. It is divided into four subsections. The first one illustrates how the WTO has been useful in helping developing countries take advantage of and manage the challenges arising from the four trends portrayed in the previous sections. The second subsection discusses from an economic perspective the role that commitments and flexibilities in trade agreements play for development. Economic literature supports the view that WTO rules and disciplines promote growth by providing the predictable environment that businesses require to flourish. At the same time it justifies the existence of WTO flexibilities including through special and differential (S&D) treatment on the basis of market failures and the different ability of WTO members to implement obligations. The third subsection describes the specific rules and disciplines that specifically apply to developing countries. The final subsection illustrates the institutional features particularly relevant for developing country members.
Increased synchronization and globalization of macroeconomic shocks
This section describes the increased synchronization and spread of macroeconomic shocks in the last few years after what appeared to be a general moderation of volatility. It examines the role of global value chains in the transmission of macroeconomic shocks and looks at how export structures influence volatility. It describes how the economic crisis spread from developed to developing countries and how a coordinated response helped to limit the use of protectionist measures in the wake of the crisis. Despite suffering the greatest economic downturn since the 1930s the world did not see a widespread resort to protectionism. Among other explanations for this was the existence of a set of multilateral trade rules.
A new role for commodities in development strategies
This section discusses the challenges and opportunities of commodity-based growth and development strategies in relatively high but volatile pricing environments. It first provides an overview of historical price developments in agriculture and natural resources. It then goes on to analyse how developing countries have been able to leverage agricultural and natural resource export potential in this high-price environment to underpin their development. The section highlights which policies have been useful but also pinpoints remaining challenges in realizing this export potential. Finally it also considers those challenges arising from heightened volatility with a particular focus on food importers and natural resource exporters vulnerable to boom-bust cycles.
Conclusions
The very first World Trade Report published in 2003 focused on trade and development. Exploring the economic link between these two areas it examined how the Doha Round – which had been launched just two years earlier – could foster development.
The world economy and trade in 2013 and early 2014
Growth in world merchandise trade remained subdued in 2013 at 2.2 per cent nearly identical to the previous year’s increase of 2.3 per cent. The increases in both 2012 and 2013 were less than the 20-year average of 5.3 per cent in 1993–2013 and were also well below the 6.0 per cent average for the 20 years preceding the 2008–09 crisis. The volume of world merchandise trade continued to climb slowly in the opening months of 2014 with an increase of 2.1 per cent in the first quarter compared with the same period in 2013. The increase for the year as a whole is expected to be greater than in 2013 as the global economy picks up momentum.
Foreword by the WTO Director-General
Since the start of the millennium we have seen strong evidence of how trade as a critical component of economic growth and development can make a positive difference in people’s lives. Rapid economic growth in many developing economies over this period has been combined with deeper integration into the global trading system. This experience has highlighted the role that trade can play in boosting per capita incomes helping developing countries to achieve wider societal goals and in improving access to advanced technologies and knowledge thereby setting the stage for future growth.
The increasing importance of developing countries in the global economy
One of the most striking features of the global economy in recent years has been the increasingly large role played by developing economies. This section examines how many countries recorded impressive growth in the last decade while making great strides in reducing poverty. Some have become leading producers and exporters of manufactured goods agricultural products and commercial services in some cases eclipsing the industrialized economies. This is especially true of the large developing economies which have taken on more prominent positions in international fora such as the G-20.
Introduction
Globalization is transforming development. This section examines how in its scope and speed the recent rise of the developing world is unprecedented – eclipsing the rise of the newly industrializing countries after the Second World War and dwarfing the earlier rise of Europe and North America in the late 19th century. There are many reasons why the developing world has achieved economic lift-off. One of the most important is its integration into the world economy – and the new access to markets technology and investment that has resulted. This rise of the developing world is one of four recent trends that holds new development opportunities while also bringing new challenges. The same is true for three other trends identified here: the spread of production chains high commodity prices and growing economic interdependence.
World Trade Report 2014
The World Trade Report 2014 looks at how four recent major economic trends have changed how developing countries can use trade to facilitate development: the economic rise of developing economies the growing integration of global production through supply chains the higher prices for agricultural goods and natural resources and the increasing interdependence of the world economy. It also looks into what role the WTO can play.
The rise of global value chains
Fragmentation of global production is not a new phenomenon but its importance has been growing over time. This trend has resulted from technological innovations in communication and transportation which have lowered coordination costs allowing countries to specialize in production of specific tasks or components rather than entire final products. This section looks at how the nature scale and scope of global value chains (GVCs) have changed dramatically during the last two decades. It examines how GVCs can offer developing countries opportunities to integrate into the world economy at lower costs but highlights that gains from GVC integration are not automatic. It considers the risks posed by GVC participation and how various policies are correlated with countries’ participation in GVCs.
The Role of Trade-Led Economic Growth in Fostering Development
The United Nations' post--2015- development agenda is taking shape. Like its predecessor the Millennium Development Goals the post--2015- agenda will reshape development policy priorities for governments and non-governmental actors alike in many cases galvanising new attention thinking and financing to tackle the priorities it identifies. This essay reviews the historical and ongoing role played by trade in sustained high growth and human development progress and makes the case that the post--2015- development agenda should include considerations related to trade rules and supply-side capacity. Given the strong links between trade-led growth economic upgrading and poverty reduction the paper argues that trade led economic growth must be prioritised in the post--2015- development agenda.
Thoughts on How Trade, and WTO Rules, Can Contribute to the Post-2015 Development Agenda
In September 2015 Heads of State and Government will gather in New York to agree the post-2015 development agenda. The role that trade will play in this agenda is neither clear nor agreed. Yet an open non-discriminatory rules-based multilateral trading system underpins sustainable development - a concept that lies at the core of much of the post-2015 debate to date. Indeed sustainable development is recognized as an objective in the Marrakesh Agreement Establishing the World Trade Organization (WTO). With the aim of stimulating discussion this paper asks the question of how trade and WTO rules can contribute to the post-2015 development agenda? In reply the author offers some thoughts on 10 contributions that trade and WTO rules can make to the post 2015 development agenda. The list is indicative not exhaustive. The 10 contributions highlight the complex way in which trade and trade policy interact with the evolving debate on the post-2015 development agenda - a debate which encompasses issues ranging from poverty eradication inclusive growth climate change mitigation decent work food security access to health services and sustainable development financing to name but a few of the topics under consideration. The paper organizes the 10 indicative contributions around three headings: trade rules as part of the enabling environment for the achievement of the post-2015 development agenda; the role that trade and trade policy can play in meeting specific goals (including possible Sustainable Development Goals); and the contribution that Aid for Trade can make.
Aid for Trade and building trade capacity: The case of Morocco
The aim of this chapter is to examine the broad framework which has been evolved for the reception of Aid for Trade (AFT) in Namibia. The economic situation before this period included the prevalence of poverty the HIV/AIDS pandemic low educational opportunities and a very highly skewed or unequal distribution of the wealth of the country which has increased income inequalities and unsustainable economic growth as outlined in Namibia Vision 2030 (Namibia Office of the President 2004). In this regard Namibia shares this economic dependency at the regional level and most trade and economic relationships are mainly with Botswana Lesotho Swaziland and South Africa all of which are members of the Southern African Customs Union (SACU) and Southern African Development Community (SADC). The objective is to create a free trade area in the Southern Africa region.
Integrating small African economies into global value chains through foreign aid: The case of Namibia
The aim of this chapter is to examine the broad framework which has been evolved for the reception of Aid for Trade (AFT) in Namibia. The economic situation before this period included the prevalence of poverty the HIV/AIDS pandemic low educational opportunities and a very highly skewed or unequal distribution of the wealth of the country which has increased income inequalities and unsustainable economic growth as outlined in Namibia Vision 2030 (Namibia Office of the President 2004). In this regard Namibia shares this economic dependency at the regional level and most trade and economic relationships are mainly with Botswana Lesotho Swaziland and South Africa all of which are members of the Southern African Customs Union (SACU) and Southern African Development Community (SADC). The objective is to create a free trade area in the Southern Africa region.
The facilitation of trade by the rule of law: The cases of Singapore and ASEAN
Geography is unkind. This could be a result of historical accident wars or colonial boundaries but the results are the same. The classical definition of the factors of production is land labour and capital. It is a fact of life that some countries have a limited supply of all three.
Integrating small and medium-sized enterprises into global trade flows: The case of China
In China the term “small and medium-sized enterprises (SMEs)” refers to “different forms of enterprises under different ownerships that are established within the territory of the People’s Republic of China that meet the social needs and create more job opportunities and comply with the industrial policies of the State”. This definition is rather more complex than that in other countries where the definition of SMEs tends to be based purely on their size. It is nevertheless the case that in China also SMEs tend to be enterprises which have fewer employers lower sales volume and lower gross assets. Most Chinese enterprises are SMEs. Indeed they account for more than 98 per cent of industry and contribute to 60 per cent of China’s GDP 75 per cent of its industrial value-added output and 50 per cent of its revenue (as of June 2012). Chinese SMEs also provide for 75 per cent of China’s urban employment opportunities and absorb more than 50 per cent of the workers laid off from the state-owned enterprises. They employ more than 70 per cent of the new entrants to the labour market (Jianjun 2006). Hence Chinese SMEs play an important role in China’s economic development due to their contribution to GDP and the employment they create as well as their vigorous creative ability.
Foreword by the WTO Director-General
It is a central premise of the World Trade Organization (WTO) that trade drives growth and development. By liberalizing trade countries benefit not only from increased access to technology and consumer goods but also from the chance to find new markets and connect to global value chains. This can quickly translate into GDP growth and a rise in the standard of living. But why do some countries seem to benefit more – and more quickly – than others? That is the question that this book tries to answer.
Note on the WTO Chairs Programme
The WTO Chairs Programme (WCP) was launched in 2010 as a capacity-building project. It aims to enhance knowledge and understanding of the trading system among academics and policy makers in developing countries through curriculum development research and outreach activities by universities and research institutions. Information on the WCP is available at www.wto.org/wcp.
Value chain governance in export commodities: The case of Indonesia
Indonesia has been regarded as one of the success stories of developing countries escaping the resource curse (Rosser 2004; 2007). In many developing countries instead of becoming a source of economic growth abundant natural resources have been associated with stagnant growth a condition known as the resource curse or the paradox of plenty. As argued by Sachs and Warner (1997) economies with abundant natural resources have tended to grow less rapidly than those with scarce natural resources. Similarly the resource curse has been defined as “the phenomenon whereby a country with an export-driven natural resources sector generating large revenues for government leads paradoxically to economic stagnation and political instability” (ODI 2006). This chapter will review the efforts undertaken by Indonesia to diminish its dependency on natural resources and to better connect to global value chains (GVCs).
Introduction
Over the past decades trade flows have become increasingly global. Today South- South trade represents around one-half of global trade and the top ranks of major traders are not exclusively occupied by industrialized countries (OECD 2010). Trade now spans all major world regions and continues to grow within and across those regions. Trade also takes new forms as trade in goods is increasingly accompanied by trade in tasks. Capital flows more freely across regions and trade and capital flows together have contributed to an increased transfer of technological change across regions. There is a strong sense that companies and countries well integrated in these global networks are part of a virtuous circle involving technological progress and growth. Not being connected however can represent a very serious bottleneck for future growth and economic development.
Aid for Trade and export diversification: The case of Barbados
Although Morocco is one of the main beneficiaries of Aid for Trade (AFT) – the first in the Maghreb and among the top ten in the world – researchers and national academic experts have not shown much interest in it.
Aid for Trade and international cooperation for middle-income countries: the case of Chile
For many developing states which have experienced a substantial decline in their share of world trade and global value added Aid for Trade (AFT) initiatives have become a critical source of support in a context where these countries suffer from both market and government failure. As such the key issue is whether AFT programmes as currently configured are the right policy instrument or set of instruments to address the weak participation of developing countries in global trade and global value chains. In many regards the problem relates to an overdependence on a narrow range of exports (e.g. agricultural and resource-based commodities and low value-added manufacturing goods and services) that are faced with declining terms of trade tariff progressivity and diminishing economic returns (Reinert 2007). One of the key criticisms that has emerged is that the focus of AFT donors and relevant implementing agencies has been heavily weighted on the architecture of trade support programmes and not sufficiently on industrial upgrading and enterprise development (Cirera 2009).
Export diversification and economic growth: The case of Mauritius
The acceleration of global trade in the latter half of the 20th century has seen patterns of trade vastly differing from those predicted by classical trade theories built around perfect competition comparative advantage and constant returns to scale (Krugman 1980). Based on Adam Smith’s concept of division of labour and specialization for economic growth and development and the Heckscher-Ohlin Samuelson (HOS) model of international trade countries should specialize in producing those goods in which they have a comparative advantage. Recent literature instead has found that countries appear to diversify in terms of production and exports as they grow.
SPS standards and international competitiveness in Africa: The case of senegal
Despite a steady decline in its share of GDP and exports the agricultural sector continues to play an important role in African economies and in Senegal in particular where it employs approximately 60 per cent of the labour force. It accounts for a quarter of national public investment but contributed only 6 per cent to GDP between 2000 and 2009 (Ministère de l’Economie et des Finances du Sénégal 2011). Horticulture is one of the promising sectors as can be observed not only from a rapid growth strategy but also from many national agricultural development strategies because of the vast range of products included and the high level of income it generates for producers especially in urban and suburban areas. In addition Senegal has both a favourable climate and a good geographical position for the export of tropical off-season products. These factors have enabled the country to increase the production and export of fruit and vegetables significantly. Horticultural production has experienced a boom over the last ten years increasing from about 150000 to 228000 metric tons between 1992 and 2000 and to 429000 metric tons in 2007 an increase of 5.5 per cent per year. In 2008 the production of vegetables (excluding potatoes and fresh tomatoes) recorded a growth rate of 8 per cent and the production of fruit experienced a growth rate of 81 per cent. Accordingly exports have increased from 6175 metric tons in 1995 to 9000 metric tons in 2000 and 31000 metric tons in 2009 an increase of about 5.5 per cent per year. The main target markets for exports are neighbouring countries and the European Union (Ndoye-Niane 2004; Senegal National Agency of Statistics and Demography 2006–2010).
Barriers to trade: The case of Kenya
International trade is the exchange of capital goods and services across international borders or territories. Even though the WTO advocates trade opening many WTO members do not liberalize every sector of the economy and instead maintain certain barriers to trade. Many of these barriers take the form of non-tariff barriers (NTBs) i.e. discriminatory non-tariff measures (NTMs) imposed by governments to favour domestic over foreign suppliers (Nicita and Gourdon 2013). Barriers can also take the form of procedural obstacles i.e. obstacles related to the process of application of an NTM rather than the measure itself.
The role of international economic law in addressing climate change
Low- and middle-income countries face supply-side constraints such as technical capacities adequate hard infrastructure capacities human capital (above all knowhow) access to adequate credit and access to environmental goods and services that affect their capacity to address climate change and other environmental issues. This chapter discusses how the existing framework of international economic law may constrain the ability of low- or middle-income countries to overcome such supply-side constraints in order to address their or their trading partners’ environmental concerns regarding climate change and be included in global value chains. We will consider what should be done from a legal perspective what might be achieved and the likely implications of international economic law for acquiring and implementing environmentally friendly technologies and financing climate change mitigation and adaptation.
The potential economic impact of Aid for Trade in the MENA region: The case of Jordan
Many developing and least-developed countries (LDCs) remain on the margins of global trade attract limited foreign or domestic investment and have achieved only very limited success in the diversification of their supply of goods and services. Within the framework of Aid for Trade (AFT) attempts are being made to explore strategies to connect firms in developing countries and LDCs to international value chains. The World Trade Organization (WTO) has defined AFT as projects and programmes that have been identified as trade development priorities in the recipient country’s national development strategies. The AFT Task Force established in 2006 underlined that clear and agreed benchmarks are necessary for the global monitoring of AFT efforts. The following categories of AFT were identified: trade policy and regulations (including trade facilitation); trade development; trade-related infrastructure; building productive capacity; trade-related adjustment; and other trade-related needs. According to the United Nations Development Programme (UNDP) developing countries that have participated in international trade – including trade with other emerging economies – make rapid progress in poverty reduction and job creation (UNDP 2013).
Acknowledgements
This volume has been produced under the WTO Chairs Programme (WCP) a WTO capacity-building programme launched upon the initiative of Hakim Ben Hammouda and Patrick Low in 2010. The WCP is jointly managed by the WTO’s Institute for Training and Technical Cooperation and Economic Research and Statistics Division under the direction of Bridget Chilala and Robert Teh respectively. The editors thank Fatima Chaudhri and Gerardo Thielen for their contribution to the initial stages of this book project and Clémence Gros for editorial assistance. Anthony Martin and Helen Swain are thanked for managing the production process of the volume.
Can developing countries use SPS standards to gain access to markets? The case of Mercosur
The role of sanitary and phytosanitary (SPS) standards in agri-business has changed over the past decade from being a technical instrument to avoid the use of food safety animal and plant health measures for protectionist purposes to being a competitive instrument in differentiated product markets (Reardon et al. 2001). The change from mass markets to differentiated and niche markets for consumers with higher purchasing power triggered this shift towards SPS measures as a strategic tool for developing and differentiating markets gaining market access coordinating the quality and safety of the food system and defining market niches for those products. On the demand side high-income consumers with varied and sophisticated tastes have buttressed this change and on the supply side so have production processing and distribution technologies that allow for product differentiation and market extension and segmentation (Reardon et al. 2001).
Integrating into the multilateral trading system and global value chains: The case of Russia
For most countries foreign trade makes a critical contribution to the national economy and the Russian Federation is no exception to this. Over the last five years the world economy has been strongly affected by the global economic crisis which also seriously affected the Russian economy in general and its foreign trade in particular.
Connecting to Global Markets
This book brings together contributions from the 14 WTO chair-holders of the first phase of the WTO Chairs Programme (2010-2014). The volume is divided into four sections focusing on export diversification the role of non-tariff measures the rule of law in connecting to global markets and the role of the Aid for Trade initiative in building trade capacity and overcoming supply side constraints.
Fundamental economic factors affecting international trade
The previous section has shown that the future of trade and economic growth depends on a range of factors. Predictions may change depending on how each of these factors develops. This section discusses how the fundamental economic factors shaping the future of international trade – namely demography investment technology energy and other natural resources transportation costs and the institutional framework – are likely to evolve in the coming years.
Trends in international trade
A comprehensive and fruitful analysis of the shaping factors of international trade and their implications for trade policy cannot be performed without having a clear idea of the evolution of trade patterns over time. This part of the Report analyses past present and future trends in international trade and economic activity. It begins with a historical analysis of trade developments from pre-industrial times to the present focusing on the key role that technology and institutions have played in the past. It then identifies and explains important trends in international trade that have emerged over the last 30 years. In doing so the section describes who the main players are in international trade (in terms of countries or companies) what countries trade and with whom and how the nature of trade has changed over time. Finally it provides some illustrative simulations of possible future trade scenarios.
Executive summary
The World Trade Report 2013 examines likely trends in world trade and how current and future economic social and political factors might weigh on these trends. Relationships are not uni-directional with trade being both the cause and effect of certain developments.
Introduction
Long-term forecasts are chronically difficult. It is unlikely that “revolutionary” events such as the explosion of communication and interactive facilities that shape our current way of life from social networking to international offshoring could have been predicted 20 years ago with any degree of precision. Nevertheless even though attempts to predict the future may to a large extent rely on extrapolations of current trends these efforts may help to take stock of important developments and identify challenges arising from changes that we are likely to face.
Foreword by the WTO Director-General
This year’s World Trade Report looks at how trade and other forces of change are affecting our world. It combines contemporary analysis with conjecture about the future. The approach is eclectic reflecting many different forces at work. The intermingling of these drivers of change is multidirectional and complex and the pace of change is rapid.
Trade openness and the broader socio-economic context
Section C showed how fundamental economic factors – demography investment technology natural resources transportation and institutions – can affect the future of trade. But trade takes place within a broader socio-economic context. This context matters for trade and trade policy. Historically social and macroeconomic concerns have repeatedly influenced decisions in trade policy matters. Section B of this report provided examples of such situations. Both themes are currently high on the political agenda and will undoubtedly affect policy-makers’ views and positions in the area of trade reform in the future. A third factor relates to environmental concerns an issue that has rapidly been gaining prominence in the national regional and global policy debate. It has also been repeatedly linked to trade notably in the context of a number of high-profile WTO disputes in the context of regional trade agreements and as an element of the on-going Doha Development Agenda.
Conclusions
This report has examined the forces that will shape the future of world trade. These forces are complex and numerous. They interact with trade itself and with each other as well as being influenced by government policy. One thing seems clear: the landscape and nature of world trade are changing fast. As trade evolves new policy challenges will arise. If properly managed international trade will further increase prosperity around the globe. What are the main issues therefore that policy-makers need to take into account?
Trade developments in 2012 and early 2013
World trade growth fell to 2.0 per cent in 2012 from 5.2 per cent in 2011 and remained sluggish in the opening months of 2013 as the economic slowdown in Europe suppressed global import demand. The abrupt deceleration of trade in 2012 was mainly attributable to slow growth in developed economies and recurring bouts of uncertainty over the future of the euro. Flagging output and high unemployment in developed countries reduced imports and fed through to a lower pace of export growth in both developed and developing economies. More positive economic developments in the United States in the early months of 2013 were offset by lingering weakness in the European Union as peripheral euro area economies continued to struggle and even core euro area economies increasingly felt the impact of the downturn in the region.
World Trade Report 2013
The world is changing with extraordinary rapidity driven by many influences including shifts in production and consumption patterns continuing technological innovation new ways of doing business and of course policy. The World Trade Report 2013 focuses on how trade is both a cause and an effect of change and looks into the factors shaping the future of world trade. One of the most significant drivers of change is technology. Not only have revolutions in transport and communications transformed our world but new developments such as 3D printing and the continuing spread of information technology will continue to do so. Trade and foreign direct investment together with a greater geographical spread of income growth and opportunity will integrate a growing number of countries into more extensive international exchange. Higher incomes and larger populations will put new strains on both renewable and non-renewable resources calling for careful resource management. Environmental issues will also call for increasing attention.