Economic research and trade policy analysis
Résumé analytique
Le Rapport sur le commerce mondial 2009 porte essentiellement sur certaines mesures contingentes auxquelles les Membres de l’OMC peuvent recourir lors de l’ importation et de l’exportation de marchandises. Le cadre juridique de ces mesures est beaucoup moins développé dans le domaine du commerce des services, mais il est également examiné.
Introduction
Services have become the most dynamic sector of world trade – but in ways that are not always recognized or understood. Just as services have come to dominate many national economies, they are playing a bigger role in the global economy as well. Many factors are driving this – including consumption, liberalization and investment – but the game-changer is technology. Services that were once difficult to trade, because they could only be delivered in person, are becoming far easier to trade, because they can be delivered digitally. The 2019 World Trade Report explores this globalization of services – why it is happening, how it is impacting economies, and where new policy approaches are needed.
Introduction
Product standards specify or pin down the characteristics of a product. These characteristics can include design, size, weight, safety, energy and environmental performance, interoperability, material, and even the process of production. Examples of standards include the dimensions of freight containers and of screw threads; safety performance of seat belts, air bags and medical devices; pasteurization of milk; and protocols that allow computers from different vendors to communicate with one another.
Resumen
El comercio internacional es parte esencial del proceso de globalización. Durante muchos años, los gobiernos de la mayor parte de los países han abierto cada vez más sus economías al comercio internacional, ya sea a través del sistema multilateral de comercio, de la intensificación de la cooperación regional o en el marco de programas internos de reforma. En términos más generales, el comercio y la globalización han reportado beneficios ingentes a muchos países y ciudadanos. El comercio ha permitido a muchas naciones obtener los beneficios de la especialización y hacer economías para producir a una escala más eficiente. Ha incrementado la productividad, impulsado la difusión del conocimiento y de nuevas tecnologías y aumentado la posibilidad de elección de los consumidores. Pero la opción de una mayor integración en la economía mundial no siempre ha gozado de popularidad y los beneficios del comercio y de la globalización no siempre han llegado a todos los sectores de la sociedad. El escepticismo sobre el comercio es cada vez mayor en determinados ámbitos y la finalidad del tema central del Informe sobre el Comercio Mundial de este año, titulado “El comercio en un mundo en proceso de globalización”, es recordar lo que sabemos sobre los beneficios del comercio internacional y los retos que plantea un nivel mayor de integración.
Improving the accounting frameworks for analyses of global value chains
The use of global input-output tables, and the creation of Trade in Value-Added (TiVA) statistics, has greatly improved our understanding of the fragmentation of global production through value chains. However, their application requires a number of assumptions that, in practice, typically understate the degree of interconnectedness. TiVA estimates implicitly assume identical production functions across firms within an industry, when in reality production functions differ considerably. Typically, larger (and foreign-owned) firms tend to be more trade oriented than smaller (and domestically-owned) firms. As a result, TiVA statistics underestimate the import content of exports for the economy as a whole, a key indicator characterizing global production. Moreover, TiVA analyses are based on basic price concepts, which provide an appropriate view of production through value chains, but are less well equipped to analyse consumption, particularly as they exclude significant distribution margins (in particular retail and wholesale activities, often including marketing activities and brands), which add value at the end of the chain. This can distort analyses using “smile curves”, which show the distance from final demand of different sectors within value chains, and in turn understate the scale of jobs supported by trade.
Compromisos de política comercial y medidas de contingencia
Los acuerdos comerciales definen las normas para la dirección de la política comercial. Esas normas deben establecer un equilibrio entre compromisos y flexibilidad. En tanto que una excesiva flexibilidad puede menoscabar el valor de los compromisos, un margen de flexibilidad demasiado estrecho puede hacer que las normas sean políticamente insostenibles. Esta tensión entre compromisos creíbles y flexibilidad está siempre latente en las negociaciones comerciales. Por ejemplo, la cuestión de un “mecanismo de salvaguardia especial” (la medida en que se autorizaría a los países en desarrollo a proteger a los agricultores frente al aumento brusco de las importaciones) fue decisiva en las deliberaciones de la minirreunión ministerial de julio de 2008, en la que se trató de acordar las modalidades de negociación -o un proyecto definitivo- para la agricultura y el acceso a los mercados para los productos no agrícolas (AMNA).
Actual and perceived effects of offshoring on economic insecurity: The role of labour market regimes
Despite broad public concern with the effect of firms’ offshoring behaviour on economic insecurity, there is scant research. Most analysis over the past 20 years – widely acknowledged as a period of rapid globalization – has focused on the impact of offshoring on workers depending on whether they are “skilled” or “unskilled”. The main research question has been the relative contribution of trade versus technological change to the rise in wage inequality in many industrialized countries. In this chapter we seek to broaden our understanding of the effect of offshoring on economic insecurity and also to connect the question of economic insecurity to national labour market institutions and to workers’ perceptions of globalization. We shift the focus to the effect of offshoring on the labour share of income rather than on its relative impact on high- and low-skilled workers. The labour share (or one minus the capital share) is affected by firm-level changes in productivity, labour demand and the distribution of value added. It is useful to capture profits and wages in the measure of economic security, since offshoring is driven by the corporations’ pursuit of higher profits and greater flexibility. Moreover, the labour share comprises workers’ earnings and employment, and analysis of the impact of offshoring on economic insecurity should include both.
Conclusions
Over the last few decades, services have become the backbone of the global economy and the most dynamic component of international trade. Services are increasingly easier to trade thanks in large part to digitalization. From online education to virtual law firms, technology is penetrating all services sectors, transforming services traditionally delivered face-to-face into remotely tradable services. Trade, long dominated by the exchange of goods, increasingly involves services, transforming the global economy in the process.
The economics of subsidies
The purpose of this Section is to assist the reader to better understand the twin questions of why governments use subsidies and how subsidies impact international trade. As is frequently the case in economic analysis, the starting point for what follows is a “benchmark” economy featuring perfectly competitive markets. This approach provides the basis for general insights into the impact of policy interventions such as subsidies. As discussed further below, under the condition of a perfectly competitive market, no case can be made for a subsidy. Introducing a subsidy or some other government measure within a perfect market framework will be inefficient and welfare-diminishing. But if the perfect market assumption is relaxed, situations may arise where a government measure like a subsidy improves welfare. An efficient subsidy would correct a market failure, bringing social and private costs and benefits into alignment.
Prólogo
En la era digital, son cada vez más los Gobiernos que han adoptado políticas encaminadas a impulsar el crecimiento por medio de la innovación y la modernización tecnológica. Las repercusiones económicas a nivel nacional asociadas a la pandemia de COVID-19 están llevando a los países a fortalecer esas políticas. En el presente informe se examinan esas tendencias y el papel que desempeñan el comercio y la OMC en este contexto. Se muestra asimismo que la cooperación internacional contribuye de manera significativa a que los países alcancen esos objetivos con mayor eficacia, minimizando al mismo tiempo los efectos indirectos negativos de las políticas nacionales.
Foreword
The World Trade Report 2004 is the second annual publication in the WTO Secretariat’s new series. As I indicated last year, the World Trade Report seeks to deepen public understanding of current trade policy issues and to contribute to more informed consideration of the options facing governments. Like last year, the Report begins with a review of recent world trade developments. This is followed by three shorter essays – on trade preferences, the temporary movement of natural persons, and geographical indications. The main topic of the Report this year is coherence.
Supply chains and trade finance
The issue of finance is an integral one in the supply chain context, given that supply chains embody flows of information, capital, goods, and labour. The concept of credit chains, reviewed here, directly addresses this. The supply chain concept has traditionally tended to emphasise the tangible/material dimensions of the chain. As a result, the financial dimension had been relatively neglected in the literature. This changed with the 2008-2009 global financial crisis. As both a potential aggravator and victim of the crisis, trade finance and supply chains became the subject of a new and rapidly growing body of literature. Previously, the subject had been largely addressed in the context of operations research and economic development. We review findings from all research areas in the literature, and observe significant merit in the credit chain concept of supply chain financial flows. Migration of the concept to other areas of supply chain research could potentially address financial dimensions of supply chains that are otherwise underemphasised in the literature.
Prefacio del director general
El Informe sobre el Comercio Mundial de este año se centra en la importancia del comercio en un mundo que durante los últimos decenios se ha caracterizado por una dependencia creciente entre los países. Esta interdependencia -que hoy llamamos globalización- es un fenómeno complejo y polifacético que comporta una intensa interacción política, social y económica a escala nacional e internacional. Pocos pondrían en duda los beneficios que ha producido la globalización en forma de una mayor prosperidad para centenares de millones de personas y una mayor estabilidad entre los países. Sin embargo, muchas personas de diferentes sociedades de todo el mundo han disfrutado poco o nada los beneficios de la globalización. Los retos a los que se enfrentan los gobiernos nacionales para administrar la globalización son formidables y para que se extienda la prosperidad se requiere una decidida unidad de miras.
Résumé analytique
Lors de la quatrième Conférence ministérielle de l’Organisation mondiale du commerce (OMC) organisée à Doha en novembre 2001, les Ministres ont engagé un large éventail de négociations commerciales multilatérales et adopté un programme de travail. Ce mandat - appelé parfois Programme de Doha pour le développement - témoigne de leur volonté commune de veiller à ce que le système commercial soit pertinent et adapté aux besoins des pays en développement. Les négociations et le programme de travail couvrent, entre autres, l’accès aux marchés des produits manufacturés, l’agriculture et les services, certaines règles (mesures antidumping, subventions et mesures compensatoires, accords régionaux), le commerce et l’environnement, les droits de propriété intellectuelle qui touchent au commerce, l’interaction du commerce et de la politique de la concurrence, la transparence des marchés publics, la facilitation des échanges et le règlement des différends. Les pays en développement sont pour beaucoup dans l’inscription à l’ordre du jour de questions telles que le commerce et le transfert de technologie; le commerce, la dette et les finances; les petites économies; les questions de mise en oeuvre (s’agissant en particulier des dossiers en suspens depuis le Cycle d’Uruguay) ou le traitement spécial et différencié. Les points de vue divergent encore sur les modalités – et, parfois, l’opportunité – de l’inclusion de toutes ces questions dans les négociations, dont la conclusion est prévue pour la fin de 2004.
The influence of international non-state actors in multilateral and preferential trade agreements: A question of forum shopping?
This chapter examines the influence that non-state actors (NSAs) seek to exert on trade policy formulation at the WTO multilateral level and at the national governmental level. The analysis focuses on international NSAs that have a substantial presence in Geneva, either because they are based there or because they seek to engage on a regularized basis with the WTO. The main objectives of this chapter are to explore how these NSAs seek to influence trade policy development, both at the WTO and the national level, especially in relation to the question of forum choice: that is, the relative benefits of negotiating multilaterally or preferentially. It also investigates whether those NSAs involved in trade policy-making consider the WTO versus PTAs as a form of ‘forum-shopping’ to pursue their particular agendas, interests and objectives.
Prólogo
El comercio ha mejorado el nivel de vida de miles de millones de personas, muchas de las cuales son mujeres. Numerosos datos empíricos demuestran que el comercio ha dado lugar a un aumento de la productividad, una mayor competencia, precios más bajos y un incremento de los ingresos y el bienestar. Sin embargo, como ha puesto de manifiesto la pandemia de COVID-19, el comercio puede verse gravemente perturbado. Existe el riesgo de que, a raíz de la crisis provocada por la COVID-19, se pierdan algunas de las ganancias económicas que han obtenido las mujeres gracias al comercio. Por consiguiente, la cooperación es esencial para mantener condiciones que permitan una rápida recuperación y para crear un comercio más inclusivo y sostenible en el futuro.
Thailand
The politicization of trade policy-making in Thailand is arguably more pronounced than elsewhere in the world, including at the global level where multilateral trade negotiations (MTNs) under the World Trade Organization (WTO) are currently stalled. Indeed, the Thai case of trade policy quagmire is quite dramatic for having adversely impinged on the country’s body politic to the extent that a popularly elected government was ousted in a military coup, and an anti-free trade agreement (FTA) bias worked its way into a new military-organized constitution, contributing to a prolonged and protracted political crisis. That Thai trade policy has become increasingly politicized over the first decade of the twenty-first century is attributable to a number of dynamics, some in parallel to trade policy experiences in the rest of the world, others more specific to domestic circumstances.
Introduction
Au cours des dernières décennies, Internet a fait irruption dans chaque recoin de notre vie des interactions sociales aux loisirs en passant par le travail et a fondamentalement remodelé nos économies, en réduisant considérablement le coût d’acquisition et d’échange de l’information. Il a alimenté la révolution numérique, modifiant radicalement notre façon de communiquer, de consommer et de produire, et il a profondément transformé le commerce international et ce qui est échangé, par qui et de quelle façon.
Mexico
In the last quarter of a century, trade policy in Mexico has undergone dramatic changes. After more than three decades dominated by an import substitution industrialization (ISI) strategy based on high trade barriers to protect the domestic market, in the early 1980s Mexico launched an ambitious process of trade liberalization. The levels of protection were reduced, first unilaterally, as part of the process of economic reform, and subsequently, through the negotiation of bilateral and regional preferential trade agreements (PTAs) with countries in North America, South America, Europe and Asia.
Foreword
In the digital age, a growing number of governments have adopted policies aimed at boosting growth through innovation and technological upgrading. The domestic economic fallout linked to the COVID-19 pandemic is leading countries to strengthen these policies. This report looks at these trends, and at how trade and the WTO fit in. It shows that there is a significant role for international cooperation to make countries’ pursuit of such goals more effective, while minimizing negative spill-overs from national policies.
Impacto del comercio en las mujeres y sus distintas funciones
Desde hace tres decenios, el mundo está cada vez más integrado. El comercio de mercancías como proporción del producto interior bruto (PIB) aumentó de cerca del 43% en 1995 a casi el 60% en 2017. Asimismo, los aranceles han ido disminuyendo desde el establecimiento del Acuerdo General sobre Aranceles Aduaneros y Comercio (GATT) en 1948. La liberalización unilateral y ocho rondas de negociaciones multilaterales han reducido considerablemente los aranceles aplicados por los Miembros de la Organización Mundial del Comercio (OMC). Los tipos de la nación más favorecida (NMF) aplicados han bajado de niveles superiores al 10% en 1995 a niveles ligeramente superiores al 7% en 2017 (gráfico 1.1). Los países que están abiertos al comercio internacional suelen crecer más rápidamente, innovar, mejorar la productividad y ofrecer mayores ingresos y más oportunidades a sus habitantes.
Executive summary
The World Trade Report 2005 begins with a brief review of salient trends in international trade, focusing firstly on recent developments and then examining medium-term developments in the oil sector and the pharmaceutical sector. Section II of WTR 2005 contains the core topic of this year’s Report, which is standards and trade in the context of the WTO. The Section looks first at the economics of standards and trade, and then at a range of institutional and policy issues. This is followed by a discussion of standards in the multilateral trading system. Section III of the Report takes up three discrete and topical issues of relevance to international trade. The three thematic essays in this Section are on the use of quantitative economics in WTO dispute settlement, trade in air transport services and offshoring services. The essay on the use of quantitative economic analysis in WTO dispute settlement procedures explains the kinds of quantitative techniques and econometric models that have been applied in various WTO legal disputes and discusses the use that was made of such analysis in a selected range of cases. The essay on trade in air transport services takes a close look at key characteristics of the industry and examines how it has evolved over time. The analysis also considers the economics of this sector, and a number of issues relating to competition, regulation, governance and trade in air transport services. Finally, the essay on offshoring services considers the economic characteristics of the activity, its scope and implications, and how it is relevant to the General Agreement on Trade in Services.
The future of Asia: Unleashing the power of trade and governance
Half a century ago, the future of Asia looked quite bleak. Civil and regional conflict ravaged many parts of the region. China was still closed to the world, and in the throes of its Cultural Revolution. India and Pakistan were recovering from wars, Indonesia and the Philippines were under authoritarian rule, and several Central Asian countries were mere shadow states of the former Soviet Union. Since then, Asia has surprised the world: Japan and the rest of East Asia have rapidly become industrialised, and successive years of high growth have been attained by other Asian countries, notably China, India and several countries in the Association of Southeast Asian Nations. This growth has been driven in great part by rapidly expanding trade, with the liberalisation of China in the late 1970s and of India in the 1990s, greater integration among North-east and Southeast Asian countries, and the collapse of the Soviet Union.
Tendencias recientes en el comercio internacional
La economía mundial creció en 2004 el 4 por ciento, la tasa anual de crecimiento más elevada en más de un decenio. Por otra parte, el PIB mundial tuvo el año pasado una base regional más amplia que en los tres años anteriores, lo que constituyó una base sólida para la aceleración del crecimiento del comercio mundial. El comercio mundial de mercancías aumentó en 2004 el 9 por ciento en términos reales (el mejor resultado anual desde 2000) y más del doble que la producción mundial (PIB medido a los tipos del mercado). Además, el crecimiento del comercio superó con creces el promedio del crecimiento registrado durante el último decenio (véase el gráfico 1 y el cuadro 1).
Supply chains, upgrading and development
“Development” is a far-reaching term, and the subjects of the reviewed literature vary by geographical and organisational coverage, stage of socioeconomic development under study, and perspective adopted. More specifically and substantively addressed is increased participation in global value chains, including upgrading, as applied to firms, industries, and regions. This is driven by both the business practitioner’s and policy maker’s perspectives, and is addressed through the global value chain framework. In contrast to supply chains, value chains provide a better macro-scale perspective on matters such as distribution of income and power across firm networks, and the interlinkages between firms and their socioeconomic environments. Operationalisable typologies of upgrading and value chain governance reviewed here will be of interest to the business practitioner and policy maker. Our literature search also yields a niche body of literature on the subject of rural development and agriculture, which is reviewed near the end of the chapter.
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.
Acknowledgements
This publication, Trade and Food Standards, has been jointly prepared by the Food and Agriculture Organization of the United Nations (FAO) and the World Trade Organization (WTO).
Cómo determinan las limitaciones y oportunidades la función de las mujeres en el comercio
Las mujeres se podrían beneficiar del aumento del comercio, pero se enfrentan a obstáculos que les impiden o dificultan el acceso a esas oportunidades. Estas limitaciones explican en parte por qué las mujeres trabajan en determinados sectores, poseen y dirigen determinados tipos de empresas, consumen determinados tipos de productos o adoptan determinadas decisiones en el seno de sus familias, como se indica en el capítulo 1. El creciente protagonismo de los servicios en la economía y el comercio mundiales (en adelante, denominado terciarización), el auge de las cadenas de valor mundiales (CVM) y la adopción de nuevas tecnologías crean nuevas y excelentes oportunidades para que las mujeres puedan comerciar más y aprovechar mejor los beneficios del comercio. Examinar estas tendencias desde una perspectiva de género permite ilustrar cómo pueden las mujeres obtener una mayor proporción de los beneficios que ofrece el comercio.
Institutions and policy issues
This Section explains how standardization and conformity assessment work in practice and describes the relevant characteristics of standardization and conformity assessment infrastructures in various regions of the world. It starts with a discussion of the standardization process and considers where standardization takes place, how it is organized and who participates in the process. Subsection 2 discusses the organization of conformity assessment at the international, regional and national levels and describes the ways in which conformity assessment requirements may impact on trade.
El comercio de servicios en el futuro
Esta sección pretende ofrecer algunas orientaciones sobre cómo evolucionará la estructura del comercio. Para comenzar, se presentan mediante un enfoque novedoso las tendencias recientes de los costos del comercio relacionados con los servicios y se señalan los factores que afectan a esos costos. A continuación, se examinan las principales tendencias futuras en cuanto a tecnología, demografía, ingresos y cambio climático para explicar de qué modo pueden influir estas en las decisiones de los países sobre con qué servicios e interlocutores comerciar, así como sobre su forma de comerciar. Por último, se cuantifica la posible repercusión de estas tendencias en el comercio de servicios empleando el Modelo de Comercio Mundial de la OMC.
Appendix
To investigate the state of the industry, the authors conducted a quantitative survey to practitioners from banks, fintech companies, multilateral development banks, industry associations, trade governance bodies, consultancies and trade policy experts. In total, 105 responses were received.
Technical notes
WTO members are frequently referred to as “countries”, although some members are not countries in the usual sense of the word but are officially “customs territories”. The definition of geographical and other groupings in this report does not imply an expression of opinion by the WTO Secretariat concerning the status of any country or territory, the delimitation of its frontiers, nor the rights and obligations of any WTO member in respect of WTO agreements. The colours, boundaries, denominations and classifications in the maps of the publication do not imply, on the part of the WTO, any judgement on the legal or other status of any territory, or any endorsement or acceptance of any boundary.
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 150,000 to 228,000 metric tons between 1992 and 2000 and to 429,000 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 6,175 metric tons in 1995 to 9,000 metric tons in 2000 and 31,000 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).
La situación del comercio EN 2008-2009
En la segunda mitad de 2008 y los primeros meses de 2009 empezaron a aparecer señales claras de un marcado deterioro de la economía mundial, con la reducción de los flujos comerciales mundiales y la caída de la producción, primero en las economías desarrolladas y después en las economías en desarrollo. Aunque el comercio mundial aumentó un 2 por ciento en volumen a lo largo de 2008, en los seis últimos meses del año su crecimiento se frenó, quedando muy por debajo del 6 por ciento de aumento en volumen experimentado en 2007. La producción mundial medida en función del producto interno bruto (PIB) real también sufrió una notable desaceleración: disminuyó a un 1,7 por ciento en 2008, frente al 3,5 por ciento registrado un año antes.
Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries: Introduction and Overview
In recent years there has been an intensification of the long-running debate on the effects of trade integration. This debate has focused largely on the impact of trade in advanced economies, which has risked diverting attention away from the impact of trade on people’s lives in developing countries, and especially the extreme poor. This volume brings together new research, using a range of different analytical approaches, that examines how the extreme poor have fared following trade liberalization in various developing countries and regions and the challenges that poor people face in benefitting from trade.
Trade Multilateralism in the Twenty-First Century
Trade multilateralism in the twenty-first century faces a serious test as weakness in the global economy and fast-paced technological changes create a challenging environment for world trade. This book examines how an updated and robust rules-based multilateral framework, anchored in the WTO, remains indispensable to maximizing the benefits of global economic integration and to reviving world trade. By examining recent accessions to the WTO, it reveals how the growing membership of the WTO has helped to support domestic reforms and to strengthen the rules-based framework of the WTO. It argues that the new realities of the twenty-first century require an upgrade to the architecture of the multilateral trading system. By erecting its ‘upper floors’ on the foundation of existing trade rules, the WTO can continue to adapt to a fast-changing environment and to maximize the benefits brought about by its ever-expanding membership.
Multilateralizing regional trade arrangements in Asia
East Asian economies have grown rapidly over the last four decades, driven by the expansion of international trade and foreign direct investment (FDI). They have now moved toward formal economic integration through bilateral and plurilateral free trade agreements (FTAs). The Association of Southeast Asian Nations (ASEAN) is emerging as the integration hub for FTAs in East Asia, while the People’s Republic of China, Japan, and the Republic of Korea also have formal economic ties with ASEAN, and India, Australia and New Zealand are joining the bandwagon. How can East Asia ensure that the region’s noodle bowl of FTAs can be consolidated into a single East Asian FTA – a stepping stone toward global integration?
Introduction
All over the world, governments are actively and openly intervening in economies to boost innovation, generate new technologies, and foster cutting-edge industries. These interventions can have positive or negative impacts, especially in today’s hyper-connected global economy. On the one hand, they can expand knowledge, enhance productivity and spread the essential tools of global growth and development. But on the other hand, they can also distort trade, divert investment and benefit one economy at the expense of others. International cooperation and rules are needed more than ever to ensure that governments’ new focus on innovation and technology policies maximizes positive spill-overs and minimizes negative ones – and to ensure that a race for technological leadership does not morph into a struggle for technological dominance. The 2020 World Trade Report looks at the role of innovation and technology policies in an increasingly digitalized world economy, and explains the role of the WTO in this changing context.