Economic research and trade policy analysis
Supply chains and services
Supply chain production has likely made production more services-intensive. Only recently has the extent of reliance on services in supply chains become evident, particularly since global trade statistics measured in value-added terms were developed. However, a full understanding of the role of services in supply chains remains elusive. Recent work reported here attempts to capture the multiplicity of distinct services implicated in supply chain production; the interdependent nature of markets; the tendency towards reliance on networks and the resultant bundling or modularising of product offerings that combine different goods and services; the role of services as a driver of innovation; services as a potentially untapped source of value-added capture, and a range of data challenges that will take time to resolve.Supply chain production has likely made production more services-intensive. Only recently has the extent of reliance on services in supply chains become evident, particularly since global trade statistics measured in value-added terms were developed. However, a full understanding of the role of services in supply chains remains elusive. Recent work reported here attempts to capture the multiplicity of distinct services implicated in supply chain production; the interdependent nature of markets; the tendency towards reliance on networks and the resultant bundling or modularising of product offerings that combine different goods and services; the role of services as a driver of innovation; services as a potentially untapped source of value-added capture, and a range of data challenges that will take time to resolve.
The economics of standards and trade
We live in a world profoundly reliant on product standards. Faxes can be sent around the world because fax machines obey a common protocol. Computer files can be shared because computers employ various standardized hardware and software formats. The need for product standards is not a new phenomenon. In biblical times, the lack of a common (standardized) language wreaked havoc at the Tower of Babel (Shapiro, 2000). In more recent times, during the great Baltimore fire of 1904, fire fighters called in from neighbouring cities were unable to fight the blaze effectively because their hoses would not fit the hydrants in Baltimore.
Foreword
The World Trade Report 2005 follows the pattern established in previous years and takes up a number of key trade policy issues facing the international trading system for analysis and discussion. The underlying objective of the Report is to contribute to a deeper understanding of trade policy issues facing governments. The core topic in this year’s report is standards and international trade. Shorter essays have been prepared on three other topics – the use of quantitative economic analysis in WTO dispute settlement, international trade in air transport services, and offshoring services.
Introduction
Over the last 50 years, the remarkable opening and integration of the world economy, in combination with the rapid pace of technological change, has contributed to raise the living standards of billions of people around the world, including some of the poorest. But this process of globalization has necessarily been accompanied by economic change, churn and displacement as labour, together with other factors of production shifted from declining industries to expanding ones.
Introduction
Subsidies are one of many policy instruments subject to rules in the multilateral trading system, but they present more complex issues for policy-makers than many other instruments subject to GATT /WTO rules. One reason for this is that subsidies can be defined in different ways. Another is that that they are used in pursuit of a wide array of objectives. Even where they are not aimed at trade, they can affect trade flows. The kinds of subsidies of primary concern to this Report are those that impart an advantage to some domestic producers and thereby affect trade. The challenging task of determining which sorts of subsidies are problematic from the perspective of the trading system, and what might be done about them, has occupied an important place on the agenda of the WTO /GATT system.
Colombia
It is usual for both governments and organizations from the private and civil society sector of developing countries to dedicate more time and resources to bilateral and regional negotiations than to multilateral negotiations. In principle, this contradicts the classic theory of trade in which the greatest welfare gains are to be found in the multilateral field and in which preferential trade agreements (PTAs) can lead to trade diversion and welfare losses.
An introduction to domestic regulation and GATS
International trade in services is governed principally by regulatory measures. Unlike trade in goods, border measures in the form of tariffs and quotas are not the main barriers to trade. This peculiarity of services trade is due to the manner by which services are produced and consumed. Due to the intangible and non-storable nature of services, suppliers and consumers often have to be in physical proximity to each other for the transaction to be completed. For this reason, economists have traditionally considered services to be non-tradable across borders and have paid little attention to it in trade theory.
Agradecimientos
Quiero expresar mi más sincero agradecimiento a mi colega, la Sra. Kenza Le Mentec, por sus valiosas orientaciones. Kenza me dio a conocer el tema e hizo importantes aportaciones, en particular para las secciones técnicas en que se describe la tecnología y para la dedicada a la facilitación del comercio. Esta publicación no hubiera sido posible sin su apoyo.
Disciplining state trading practices: Lessons from WTO accession negotiations
This chapter addresses a number of concerns associated with state trading. What are the applicable WTO rules in this area and have they kept up with the evolving nature of production methods and the changing landscape of state trading enterprises (STEs)? How have state trading practices been approached in WTO accession negotiations? How many WTO members acceding under the provisions of Article XII of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) have accepted specific obligations aimed at disciplining the operations of STEs? What specific patterns have emerged across these commitments and how have they evolved over time? Have the commitments resulting from WTO accession negotiations offered a more effective and forward-looking approach to disciplining STE activities? What is the systemic relevance of STE-related accession commitments and what lessons can be drawn about possible future multilateral disciplines in this area? What has been the contribution of accession commitments relating to transparency in privatisation programmes? STE disciplines have been in the rulebook of the multilateral trading system since 1947, but have not kept track with the evolving nature of state trading operations. State trading plays a significant role in the economies of the majority of Article XII members. The applicability of existing WTO rules in this area has therefore been put to practice in their accession negotiations. The commitments resulting from accession negotiations have produced more comprehensive and forward-looking disciplines, which arguably capture modern-day state trading operations more adequately. Specifically, STE-related accession commitments have evolved over time to extend the scope of obligations to the purchases and sales of both goods and services, contribute further definitional clarity to the term ‘state trading enterprise’ and address the transparency deficit in this area. In addition to steering the operations of acceding governments’ STEs towards conformity with WTO principles, the evolution of these commitments is of systemic relevance to the multilateral trading system, as it points to the possible direction of future disciplines in this area. While not pre-judging the future development of multilateral provisions on state trading, it is argued that Article XII members, which today account for one-fifth of the WTO membership, are well placed to influence the direction of future discussions in the area of STEs.
Geometry of global value chains in East Asia: The role of industrial networks and trade policies
East Asia is one of the best-known examples of a regional economic integration process that was initially driven by deepening industrial relations, rather than by political agreements, among countries of the region. The institutional or legal aspects of regional integration came only afterwards, in a typical “bottom-up” way. The situation differs from what has occurred in North America, where the ratification of the North America Free Trade Agreement (NAFTA) was a catalyst for the build-up of the USMexico economic ties.
Résumé analytique
Le commerce international fait partie intégrante du processus de mondialisation. Depuis de nombreuses années, la plupart des pays ouvrent de plus en plus leur économie au commerce international, que ce soit dans le cadre du système commercial multilatéral, d’une coopération régionale accrue ou de programmes de réformes internes. Plus généralement, le commerce international et la mondialisation ont apporté des avantages considérables à nombre de pays et à leurs citoyens. Le commerce a permis aux pays de tirer parti de la spécialisation et des économies d’échelle pour produire de manière plus efficiente. Il a entraîné des gains de productivité, favorisé la diffusion des connaissances et des technologies nouvelles et élargi le choix des consommateurs. Mais l’intégration plus poussée dans l’économie mondiale n’a pas toujours été bien accueillie et les avantages du commerce et de la mondialisation n’ont pas toujours profité à tous les segments de la société. On observe dans certains milieux un scepticisme croissant à l’égard du commerce; d’où le thème du Rapport sur le commerce mondial de cette année, à savoir «Le commerce à l’heure de la mondialisation», qui vise à rappeler ce que nous savons des gains tirés du commerce international et des défis liés à une intégration plus poussée.
Why do skills and trade matter?
Over recent decades the global economy has experienced a profound transformation, mostly as a result of the joint forces of trade integration and technological progress, combined with important political changes. There is no doubt that this transformation has been accompanied by significant positive effects at the global level. Increased trade integration has helped to raise incomes in advanced and developing economies, lifting millions out of poverty. Since the global financial crisis of 2007–08, however, trade, productivity and income growth have decelerated, partly because of a slowdown in the pace of trade reforms fuelled by a change in attitudes towards globalization and trade.
Análisis económico de las subvenciones
El objeto de la presente Sección es ayudar al lector a comprender mejor la doble cuestión de por qué los gobiernos utilizan las subvenciones y qué efectos tienen en el comercio internacional. Como suele suceder en los análisis económicos, el punto de partida para lo que sigue será una economía “de referencia”, con mercados con una competencia perfecta. Este enfoque sirve de base para obtener indicaciones generales sobre el impacto de intervenciones públicas como las subvenciones. Como se explica más adelante, cuando un mercado es perfectamente competitivo, no hay ningún argumento que justifique una subvención. Introducir una subvención u otro tipo de medida gubernamental en un mercado perfecto no sería eficaz y reduciría el bienestar. Sin embargo, si se atenúa la hipótesis del mercado perfecto, se pueden dar situaciones en que una medida pública, como una subvención, mejore el bienestar. Una subvención eficaz puede corregir un mal funcionamiento del mercado y equilibrar así los costos y beneficios sociales y privados.
Introducción
El mundo está en continuo proceso de cambio, impulsado por innovaciones tecnológicas que afectan la forma en que vivimos y hacemos negocios. La historia de la economía mundial está íntimamente ligada al progreso tecnológico. La máquina de vapor facilitó la mecanización de la producción, el descubrimiento de electricidad permitió la producción en masa y la aparición de Internet permitió coordinar a distancia las diversas fases de producción, lo que llevó a una fragmentación de la producción que dio origen a cadenas de valor mundiales.
Multilateralizing regionalism: Case study of African regionalism
Regionalism emerged as a global policy concern during the Uruguay Round of multilateral trade negotiations, towards the end of the 1980s. Before then it had comfortably co-existed alongside the multilateral trading system. The stability of the system hinged strongly on the leadership that the US had provided since the early days of the GATT until the late 1980s. It was only when the US turned to regionalism that the edifice of the multilateral system began to experience tremors, and regionalism started becoming a threat to the functioning and credibility of the multilateral trading system. The stumbling block/building block metaphor widely credited to the Columbia University scholar, Jagdish Bhagwati, reflected the anxiety that the rapid spread of regionalism caused.
Políticas de ajuste en el mercado de trabajo y políticas en respuesta a los cambios en la distribución
Para que la economía se beneficie de los avances tecnológicos y del comercio, los trabajadores tendrán que cambiar a menudo de empleo u ocupación, un proceso en el que pueden quedar desplazados. Cuanto más suave sea este proceso en el mercado laboral, menores serán los costos del ajuste para los trabajadores desplazados y mayores los beneficios netos de los cambios tecnológicos y del comercio para la sociedad. Los gobiernos y otras instituciones pueden hacer que el mercado laboral responda mejor a los cambios económicos mediante la adopción de diversas medidas destinadas básicamente, aunque no de modo exclusivo, a ese mercado. La disminución de los costos del ajuste para los trabajadores puede atenuar también la resistencia social a los cambios tecnológicos e impedir el auge del proteccionismo comercial.
Multilateralizing preferential trade agreements: A developing country perspective
Preferential trade agreements (PTAs) continue to proliferate. Always a central element of the trade policy strategy of European countries, ‘regionalism’ has now become the dominant form of international cooperation on trade policy for virtually all the members of the WTO, developed and developing. The proliferation of PTAs has been accompanied by steadily declining barriers to trade generally, and high growth rates in world trade. The uniform tariff equivalent of all applied most favoured nation tariffs of high-income OECD countries in 2005 was 4.8 per cent. Excluding agricultural products, the figure drops to 2.7 per cent (Kee, Nicita and Olarreaga, 2008). For the developing countries, the focus of this chapter, applied MFN tariffs have also fallen substantially; Kee et al. estimate that the median average overall trade restrictiveness index was 7.5 per cent for the fifty-seven countries for which data are available in 2005, compared with 12.3 per cent ten years earlier. This reduction in external MFN protection reflects mostly unilateral, autonomous actions by governments (Martin and Messerlin, 2007). While PTAs can be building blocks or stumbling blocks for multilateral liberalization, it is incontrovertible that the level of MFN trade barriers has been falling.
Introduction
The COVID-19 pandemic highlights a paradox: globalization has created a world that is both more vulnerable and more resilient to crises. On the one hand, economic integration makes us more dependent on far-flung trade networks and more exposed to cascading risks and shocks. On the other hand, economic integration also allows us to diversify suppliers, pool resources, and share information and expertise. The same features that make the global economy susceptible to crises – openness, interdependence, networked technologies – also make it adaptable, innovative, and better able to withstand crises when they hit. Strengthening trade, by making it more diversified, inclusive and cooperative, is also central to making the global economy more resilient to current and future crises, from pandemics to climate change.
Foreword
Trade in food is difficult to imagine without standards. Food standards give confidence to consumers in the safety, quality and authenticity of what they eat. By setting down a common understanding on different aspects of food for consumers, producers and governments, standards enable trade to take place. If every government applies different food standards, trade is more costly, and it is more difficult to ensure that food is safe and meets consumers' expectations.
Merchandise trade, volume (real) terms, 2009
World merchandise trade in volume terms (i.e. excluding the influence of prices and exchange rates) fell by 12.2 per cent in 2009. This was well below the 2.1 per cent increase for 2008, and significantly lower than the 10 year average increase of 4.1 per cent. The drop in trade was also larger than the 2.3 per cent decline in GDP for 2009, which is not surprising since world trade generally grows faster than GDP when output is accelerating and declines more when output slows.
Avertissement
Tous les avis donnés dans le présent dictionnaire sur les Accords, les dispositions et les rapports des groupes spéciaux et de l'Organe d'appel de l'OMC, ou sur tout autre renseignement fourni par l'OMC relèvent de la seule responsabilité de l'auteur.
Préface
Le Dictionnaire des termes de politique commerciale en est à sa sixième édition. Il a encore grossi et compte désormais plus de 3000 entrées et renvois. Bon nombre de ces entrées sont nouvelles.
Executive summary
The crisis in Ukraine has created a humanitarian crisis of immense proportions and has also dealt a severe blow to the global economy. The brunt of the suffering and destruction are being felt by the people of Ukraine themselves but the costs in terms of reduced trade and output are likely to be felt by people around the world through higher food and energy prices and reduced availability of goods exported by Russia and Ukraine. Poorer countries are at high risk from the war, since they tend to spend a larger fraction of their incomes on food compared to richer countries. This could impact political stability.
Multilateral system: mitigating the effects of the crisis and preparing for a post-war global economy
First, the war in Ukraine is impacting the whole world. As such, it is not a local war with local effects only. It therefore needs to be viewed and treated in the context of global trade and development. This is likely to result in a move for reshoring, near-shoring and for ‘friend-shoring’ – either making strategically important goods at home or procuring them from allies. This will have implications for global trade and development.
Prefacio
El Diccionario de Términos de Política Comercial ha llegado a su sexta edición. Su tamaño ha vuelto a aumentar. En la actualidad contiene más de 3.000 entradas y referencias cruzadas, muchas de ellas nuevas. En otros casos, los cambios que se han producido desde la elaboración de la edición anterior han exigido que se reformulara completamente la entrada. Ha sido necesario actualizar otras muchas en mayor o menor medida. He intentado ser razonablemente exhaustivo, pero no cabe duda de que siempre podría incluirse algo más.
Holistic use of technologies for Smart Customs of the future
2021 has highlighted the critical role that Customs play in enabling global trade. To make the global supply chains of the future more efficient, Smart Customs have to minimize Customs clearance time and costs, while intelligently managing inbound and outbound goods and vehicles. Disruptive technologies such as IoT devices are enabling autonomous equipment to drive effective monitoring of cargo and tracking of journeys.
Foreword by the WTO Director General
We live in a time of rapid technological change that has the possibility of profoundly altering the conduct of international trade. For many people keeping up to date with the latest technology and fully understanding its implications can be daunting. This report will help illuminate the so-called “disruptive technologies” that are most relevant to border management, as well as assist governments to better understand the challenges and benefits of their use by Customs.
The trade implications of a low-carbon economy
The global economy needs to effect wide-ranging and immediate changes to reduce its greenhouse gas emissions sufficiently to limit climate change. This chapter explores how the transition to a low-carbon economy could impact international trade patterns, and outlines the role that trade, trade policy and international cooperation can play in supporting a just low-carbon transition. Although a low-carbon transition entails short-term investment and adjustment costs, it can also provide important economic benefits and opportunities. The WTO has an important role to play in increasing the ambition and viability of climate change mitigation actions.
Acknowledgements
The World Trade Report 2022 was prepared under the general responsibility and guidance of Anabel González and Jean-Marie Paugam, WTO Deputy Directors-General, and was coordinated by José-Antonio Monteiro and Ankai Xu.
Carbon pricing and international trade
Although different instruments can be used to mitigate climate change, carbon pricing has attracted increasing attention. This chapter explores the role of carbon pricing in reducing greenhouse gas emissions and its implication on international trade and trade policies. Carbon pricing puts a price on carbon emissions, which can motivate firms and individuals to make more climate-friendly investing and purchasing decisions. While the proliferation of carbon pricing schemes highlights the urgency to tackle climate change, they may lead to an unnecessary complex patchwork of domestic and regional schemes. Greater international cooperation is essential to find common solutions to carbon pricing, and the WTO remains an appropriate forum to contribute to these efforts.
Introduction
Tackling climate change requires a transformation of the global economy. While limiting consumption and changing lifestyles would help, reducing greenhouse gas emissions to net zero will be impossible without technological and structural change on a global scale. This transformation will involve costs, but also opportunities – not just to head off an environmental catastrophe, but to reinvent the way the world generates energy, manufactures products and grows food. Just as trade helped to drive economic progress in the past – by incentivizing innovation, leveraging comparative advantages and expanding access to resources and technologies – trade can play a central role in driving progress towards a low-carbon global economy. But harnessing the potential of trade will demand new policies and more cooperation.