Economic research and trade policy analysis

Over the past decade, world trade has expanded signifi cantly. By 2007, global trade had reached more than 60 per cent of world GDP, compared with less than 30 per cent in the mid-1980s. Few would contest that increased trade has contributed to global growth and job creation. However, strong growth in the global economy has not, so far, led to a corresponding improvement in working conditions and living standards for many. Absolute poverty has declined, thanks to the economic dynamism of recent years, the efforts of private companies, migrant workers and their remittances and the international development community. Nevertheless, in many instances, labour market conditions and the quality of employment growth have not improved to the same degree. In many developing economies job creation has mainly taken place in the informal economy, where around 60 per cent of workers fi nd income opportunities. However, the informal economy is characterized by less job security, lower incomes, an absence of access to a range of social benefi ts and fewer possibilities to participate in formal education and training programmes – in short, the absence of key ingredients of decent work opportunities.

The starting point for any economist is the superiority of the market mechanism of free exchange in efficiently allocating resources and thereby maximizing social welfare. However, in order for that ‘invisible hand’ to perform its winning act, the market needs to display certain characteristics

This chapter looks at the relationship between the WTO accession process and structural reforms in developing countries. It finds that developing economies that are in the process of acceding to the WTO commit to more policy reforms (proxied by prior actions in the context of the World Bank’s development policy lending) than developing countries that are already members of the WTO or that have not applied to become members. It also finds that, for almost all developing economies acceding to the WTO, the country risk, measured by a composite indicator of political, financial and economic risk called the International Country Risk Guide, and the policy and institutional indicator, measured by the World Bank Country Policy and Institutional Assessment, significantly improve when a country achieves WTO membership compared with at the beginning of the WTO accession process.

The Global Value Chains Development Report is a joint publication of the World Trade Organization (WTO), the Institute of Developing Economies (IDE–JETRO), the Organisation for Economic Co-operation and Development (OECD), the Research Center of Global Value Chains (RCGVC-UIBE), the World Bank Group, and the China Development Research Foundation, based on joint research efforts to better understand the ongoing development and evolution of global value chains and their implications for economic development.

Many of the challenges that face MSMEs in their search for financing are broad in scope and cannot easily be addressed by any single solution. As one of the fintech respondents [*22 Fintech] observes, “It is easy to say that technology is the answer here, and while innovation will help banks distribute trade finance assets to smaller investors and better understand the risks associated with MSMEs, there is also a greater change needed”. At this early stage of the adoption of such technological innovation, there is very little evidence to suggest that it is being utilized by corporates and MSMEs just yet. That said, it is difficult to dispute that technological innovation and the various emerging technologies in the industry are a critical piece in the puzzle of overcoming these challenges.

The economy of Chinese Taipei has always been highly dependent on trade. Nevertheless, its WTO accession negotiations were demanding – although the results have been significant and beneficial – involving a total of eleven formal meetings and five informal meetings for the working party, and approximately 200 bilateral meetings between Chinese Taipei and thirty different WTO members. The gradual opening of Chinese Taipei’s market exposed domestic industries to global competition, necessitating a process of adjustment and adaptation that has ultimately led to economic growth. For the more vulnerable industries, the challenges of market liberalisation have acted as an incentive to restructure and reinvent in order to improve competitiveness. Chinese Taipei’s accession to the WTO has also been a catalyst for the globalisation and development of these industries and necessitated a process of adjustment and adaptation that has ultimately led to economic growth. The trade policies and regulations of Chinese Taipei underwent a thorough review and revision as a result of the requirements of WTO membership, and this legislative overhaul has been highly beneficial in modernising the trade regime.

The first Section of the World Trade Report 2004 discusses recent developments in the structure, value and volume of international trade in goods and services, and trade prospects for 2004. It also includes analyses of non-reciprocal preferences, the international movement of persons supplying services, and geographical indications. The second Section of WTR 2004 then examines the subject of policy coherence, stressing the importance of complementary national policies to enable trade liberalization to create larger benefits for society. It focuses on four important areas of economic policymaking. They are: i) the macroeconomy; ii) the state of infrastructure and infrastructural services, particularly in areas linked closely to trade performance (transport, telecommunications, financial services and business services); iii) market structure, with special emphasis on the level of competition and presence of externalities; and iv) the quality of institutions. The last part of the second Section of the Report then explores the international dimensions of coherence, identifying the role of international cooperation in supporting coherent policy formulation at the national level, particularly in the field of trade policy.

That the global economy has gone through a period both of enormous dynamism and of enormous disruption over the past quarter-century is hardly surprising – the two are inextricably linked. The world economy only grows when productivity rises; and productivity only rises when the world economy generates more and better output more efficiently. Current concerns about globalization in many countries are traceable at least in part to the economic adjustment challenge posed by a global economy becoming ever more productive. The World Trade Report 2017 looks at two of the most powerful drivers of global economic advance today, technology and trade, and examines how they are affecting labour markets. It analyses how the challenges of adjusting to this new labour market are changing and how economies are adapting. In particular, it examines the similarities and differences in the way that technology, on the one hand, and trade, on the other, influence labour market outcomes.

Border checkpoints in developing countries often teem with traders transporting small quantities on foot or pushing carts alongside trucks that sport the insignia of formal companies. Those small-scale, cross-border traders may eventually be superseded by larger import-export firms. But during the process of development, their trade may be a valuable avenue for poverty alleviation and women’s empowerment. This chapter focuses on the latter in the context of small-scale, cross-border trade in Cambodia and Lao People’s Democratic Republic (Lao PDR). It analyzes recent survey research undertaken by the World Bank and draws conclusions about the key policy implications for facilitating the poverty-reducing impact of women’s participation in small-scale, cross-border trade.