Economic research and trade policy analysis
The impact of security concerns on trade
A series of crises over the past years has changed the perceptions about trade and interdependence. What used to be considered as critical to economic progress and security is now sometimes perceived as a source of risk that needs to be limited. Moreover, security concerns are no longer exclusively expressed in relation to conflict but encompass the much wider notion of economic security. As a result, security concerns percolate through trade policy more widely. This chapter highlights that despite disruptions in global supply chains, trade remains a source of security, especially when embedded in a multilateral rules-based system. It argues that fragmentation would weaken security and increase the likelihood of conflict, while re-globalization is a more promising avenue to strengthen security going forward.
Disclaimer
The World Trade Report and its contents have been prepared under the responsibility of the WTO Secretariat, except for the opinion pieces written by the external contributors, which are the sole responsibility of their respective authors. The Report does not necessarily reflect the positions or opinions of WTO members and it is without prejudice to their rights and obligations under the WTO agreements. The opinions expressed and arguments employed herein are not intended to provide any authoritative or legal interpretation of provisions of the WTO agreements and shall in no way be read or understood to have any legal implications. The authors of the Report also wish to exonerate those who have commented upon it from responsibility for any outstanding errors or omissions.
Conclusion
For almost seven decades now, economies around the world have been opening their markets to each other, recognizing that interdependence and cooperation create shared prosperity. However, severe challenges, such as the financial crisis of 2008-09, the COVID-19 pandemic and the war in Ukraine, now threaten to undermine this vision, highlighting a number of risks inherent in a globalized world. As a result, some have begun to question the benefits of globalization. The implication of this way of thinking is a more fragmented, less integrated world. Fortunately, this has not happened yet. There is still time to act, but, as this report shows, the changing narrative on globalization has already translated into heightened tensions and first signs of geoeconomic fragmentation in trade.
Foreword by the WTO Director-General
The post-1945 international economic order was built on the idea that interdependence among nations through increased trade and economic ties would foster peace and shared prosperity. For most of the past 75 years, this idea guided policymakers, and helped lay the foundation for an unprecedented era of growth, higher living standards and poverty reduction. Today this vision is under threat, as is the future of an open and predictable global economy.