Economic research and trade policy analysis
Trade and inclusiveness within economies
Trade has raised aggregate welfare and reduced poverty without necessarily raising inequality in many economies, but the impact of trade is more complex for individuals. People may benefit from cheaper prices, larger variety and export opportunities, but they may also face increased competition and may, therefore, either gain or lose from trade. This chapter reviews why, although most people gain from trade, some suffer losses. These losses can be aggravated by distortions and barriers, such as mobility costs or monopolies, that tend to impact more vulnerable groups disproportionately, and may prevent them from adjusting to import competition and accessing export opportunities. The chapter also examines why using restrictive trade policy to redistribute gains from trade is often unsuccessful and can have unintended consequences, such as retaliation by trade partners. In contrast, domestic policies, such as education and social protection, are more effective in addressing inequality. Their importance is likely to grow as the digital revolution, climate change and geopolitics continue to shape the distributional impacts of trade.
Trade and income convergence
The past quarter of a century has witnessed an unprecedented level of income convergence, accompanied by the integration of many developing economies into global markets. Despite this, some economies have been left behind. This chapter discusses how the participation of developing economies in global trade and investment flows can accelerate structural transformation and enhance productivity growth, thereby helping lowand middle-income economies to achieve the economic growth that ensures convergence with high-income economies. The chapter also examines why some economies have taken little advantage of globalization, and focuses on barriers to maximizing the gains from trade participation, such as trade costs and commodity dependence. Finally, the chapter discusses how recent trends in the global economy are shaping future opportunities and challenges for developing economies to leverage trade and foreign direct investment for economic growth, and which policies can help to achieve convergence in the upcoming decade.
Executive summary
Never before have the living conditions and prospects of so many people changed so dramatically in the space of a few decades.
Conclusions
Over the past 30 years, the world has witnessed a period of unprecedented income convergence, accompanied by a steep reduction in poverty, but inequality remains high.
Executive Summary
Data flows are the lifeblood of our modern social and economic interactions. However, concerns related to privacy and data protection, national security, cybersecurity, digital protectionism and regulatory reach, among others, have led to a surge in regulation conditioning (or prohibiting) its flow or mandating that data be stored or processed domestically.
Social
The emergent renewable hydrogen sector offers economic and sustainable development opportunities. Many developing economies see new possibilities in participating and profiting from the global energy market, as they have high renewable energy potential and could potentially produce renewable hydrogen and its derivatives at low cost.
Data flows and the evolving regulatory environment
Global traffic from data centres is estimated to have increased fourfold since 2015 – from 5 zettabytes in 2015 to around 20 in 2021. To put that into perspective, a zettabyte is 1 000 000 000 000 000 000 000 bytes (21 zeros), that is, a thousand exabytes, a billion terabytes, or a trillion gigabytes. There are 20 times more bytes of traffic from data centres than there are stars in the expanding universe.
Acknowledgements
The publication “Pathways to Sustainable Trade and Peace” was prepared under the general responsibility and guidance of Maika Oshikawa, Director of the Accessions Division.
Introduction
Throughout recorded human history, interactions among diverse nations, societies and communities have been shaped by complex combinations of economic, political and social forces. A topical and highly relevant component of these interactions in today’s world relates to linkages between trade and peace.
Foreword
Today, our social and economic activities are underpinned by the movement of data across international borders. They help us connect with family and friends; they support research addressing global challenges; they enable the co-ordination of production along supply chains; and allow firms, notably smaller ones, and people to access global markets. In sum, cross-border data flows have become the lifeblood of modern day social and economic activities.
Executive summary
Renewable hydrogen and hydrogen-derived commodities – such as ammonia, methanol and e-kerosene – are expected to play important roles in the energy transition. While most energy consumption can be met using renewable electricity or biofuels by 2050 (IRENA, 2023a), the use of renewable hydrogen and its derived commodities will be required in hard-to-abate sectors, including in industry as feedstocks (e.g. chemical manufacturing, fertiliser production, refining, steel manufacture) and heavy-duty transport as e-fuels (e.g. in maritime transport and aviation). Their use may account for around 14% of final energy consumption in 2050 (IRENA, 2023a).
D.2. Impact on trade patterns from changes in data localisation policies
Figure A D.2 displays the projected change in real exports between regions with different data localisation regimes (upper panel) and in different geopolitical blocs (lower panel) for Scenarios A-C since Scenario D is almost identical to Scenario 4 and thus already discussed in Annex C. In Scenario A No data localisation the largest projected increase in exports is projected for trade between regions with regimes 1 and 2 and other regions, for example between 0 and 1 and between 1 and 2. The reason is that data management costs are projected to fall most for these regions. In regions with regime 0 there are no projected changes in costs. This is also the case for most regions with regime 3, because they tend to have both prohibitive data localisation and data flow policies.