Economic research and trade policy analysis

Part I described the system of food standards and trade rules created by members for members. With such a system in place, what is then required to keep it working and fit for purpose? And how can members take advantage of the benefits it has to offer?

The intangibility of services makes them analytically and statistically elusive. Systematic efforts to deepen our understanding of the economic role played by services – particularly at the international level – have only occurred in the last thirty years. These efforts have intensified recently with the increased presence of global value chains, where services fulfill a vital and complex role.

Since the 1980s many developed and developing countries have experienced increases in within-country inequality. The growing income gap has coincided with the period of increasing exposure of countries to globalization through increased flows of goods, services, capital and labour across international borders. These developments have instigated a large debate in the academic and policy circles as to whether globalization is responsible for the growing inequality within countries.

A crucial step towards end-to-end trade digitalization is creating an ecosystem that allows for seamless exchanges of data between existing platforms. This requires developing and implementing globally accepted digital standards for trade. As these initiatives play a crucial role in shaping the landscape within which each DLT-in-trade project operates, standardization initiatives have been included in more detail in this updated version. To this end, these initiatives will be separated into standalone sections with a corresponding tables and each project will be examined more deeply.

The World Trade Report 2021 was prepared under the general responsibility and guidance of Anabel González, WTO Deputy Director-General, and Robert Koopman, Director of the Economic Research and Statistics Division. The report was coordinated by Eddy Bekkers and José-Antonio Monteiro. The authors of the report are Marc Auboin, Marc Bacchetta, Francesco Bellelli, Cosimo Beverelli, Eddy Bekkers, Emmanuelle Ganne, John Hancock, Katharina Laengle, Kathryn Lundquist, José-Antonio Monteiro, Roberta Piermartini, Yves Renouf, Victor Stolzenburg and Ankai Xu (Economic Research and Statistics Division).

This section discusses international regulation of trade in natural resources. It starts with an overview of the legal framework of the WTO and briefly addresses how natural resources fit within this. Rather than attempt an exhaustive treatment of every WTO rule that may have a bearing on trade in natural resources, this section sets out the rules that have particular relevance for this kind of trade, and considers whether, and to what extent, these rules respond to the salient characteristics of natural resource sectors. This section also presents a selection of international agreements that regulate trade in natural resources and discusses their relationship with WTO disciplines. It ends by focusing on a number of issues in this sector that appear to be of actual or potential relevance to international cooperation and to the multilateral trading system.

Trade in services continues to evolve. Technology and regulatory reforms are driving a fundamental transformation, creating new demand while simultaneously helping to reduce trade costs and opening further opportunities to trade services. Under the impetus of global value chains, demographic trends, rising per capita incomes in emerging markets and environmental concerns, demand for foreign-supplied services is on the rise. The evolving avenues, actors and composition of services trade increase its potential to contribute to inclusive economic growth and development, but also present a number of challenges that need to be addressed to fulfil this potential.

Vivimos en un mundo firmemente basado en normas de productos. Es posible enviar un fax a cualquier lugar del mundo porque los aparatos de fax obedecen a un protocolo común. Es posible compartir archivos informáticos porque los ordenadores utilizan modelos normalizados de equipo y programas informáticos. La necesidad de normas de productos no es nueva. Ya en tiempos bíblicos, la falta de un idioma común (normalizado) hizo estragos en la Torre de Babel (Shapiro, 2000). En tiempos más recientes, durante el gran incendio de Baltimore de 1904, los bomberos que acudieron de ciudades vecinas no pudieron luchar contra el fuego de manera eficaz porque sus mangueras no encajaban en las bocas de incendio de Baltimore.

El Informe sobre el Comercio Mundial de 2004 ha sido elaborado bajo la supervisión general del Director General Adjunto Dr. Kipkorir Aly Azad Rana. Patrick Low, Director de la División de Estudios Económicos y Estadística, dirigió el equipo encargado de redactar el Informe. Los autores principales del Informe son Bijit Bora, Zdenek Drabek, K. Michael Finger, Marion Jansen, Alexander Keck, Patrick Low, Hildegunn Kyvik Nordås, Roberta Piermartini y Robert Teh. Barbara D’Andrea, de la División de Estudios Económicos y Estadística, es coautora de la Sección IB.2. Jeffrey Gertler, de la División de Asuntos Jurídicos, contribuyó a la redacción de la Sección IB.1. Mukela Luanga, de la División de Estudios Económicos y Estadística, proporcionó material esencial a varios de los autores principales. Las estadísticas comerciales y la información arancelaria fueron facilitadas por el Grupo de Estadística de la División de Estudios Económicos y Estadística, bajo la coordinación de Guy Karsenty, Julia de Verteuil, Andreas Maurer y Jürgen Richtering.

Over the last decade, attitudes toward globalization have shifted in a number of developed countries, contributing to rising trade tensions. A growing public perception holds that the integration of goods, services, labor, and capital markets only benefits a happy few while leaving many people behind. This change in attitudes has been an important factor in the transformation of the political landscape with the election in several countries of politicians who question the effects of international cooperation and who have adopted fewer cooperative approaches to trade and migration.

Estimated at US$36 billion and employing over four million people, the Indian health care sector is one of the largest service sectors in the economy today. With a compound annual growth rate (CAGR) of 15 per cent, the Indian health care sector is expected to reach US$280 billion by 2020. A 2003 report titled India’s New Opportunity: 2020, prepared jointly by the All India Management Association, Boston Consulting Group and the Confederation of Indian Industries, predicts that over 40 million new jobs and US$200 billion increased revenues are expected to be generated by the Indian services sector by 2020, and the health care sector will play an important role in generating these jobs and revenues (AIMA/BCG 2003). Hence, this sector is predicted to grow rapidly and is seen to have considerable potential due to the growing demand for health care services in India. The reasons are many, including rising incomes, a growing propensity to spend on health care, an emergence of lifestyle-related diseases, and demographics.

This publication was prepared by Arti Gobind Daswani, Roy Santana and János Volkai of the WTO Secretariat with the support of WTO Deputy Director-General Karl Brauner, Valerie Hughes (former Director of the WTO’s Legal Affairs Division), Suja Rishikesh Mavroidis (Director of the WTO Market Access Division) and John Adank (Director of the Legal Affairs Division). Special acknowledgment is owed to WTO staff members Jesse Kreier and Olga Falgueras Alamo, from the Rules Division, for their contribution to the compilation of relevant documents.

Micro, small and medium-sized enterprises (MSMEs) are the backbone of the economy, representing 95 per cent of all companies worldwide and accounting for 60 per cent of employment. They are fundamental to the day-to-day provision of goods and services around the world. Yet many struggle to grow and trade. Among the many challenges that MSMEs face, a lack of access to finance, including trade finance, is frequently identified as a critical barrier to growth. The MSME financing gap is a reality that cannot be ignored and that should be tackled with determination if we wish to ensure that small players are given a chance to thrive.

Le commerce mondial des marchandises en volume (abstraction faite de l’influence des prix et des taux de change) a fléchi de 12,2 pour cent en 2009 (voir le tableau 2), alors qu’il avait augmenté de 2,1 pour cent en 2008 et de 4,1 pour cent en moyenne au cours des dix dernières années. La contraction des échanges a été plus importante que la diminution de 2,3 pour cent du PIB en 2009, ce qui n’a rien d’étonnant puisque le commerce mondial augmente généralement plus vite que le PIB quand la croissance de la production s’accélère et décroît plus rapidement quand elle se ralentit (voir la figure 8).

Le Rapport sur le commerce mondial 2005 est structuré de la même façon que les années précédentes et contient une analyse d’un certain nombre de questions de politique commerciale essentielles auxquelles est confronté le système commercial international. Son objectif fondamental est de contribuer à mieux faire comprendre les questions de politique commerciale auxquelles les gouvernements sont confrontés. Le thème central de ce rapport annuel est le lien entre les normes et le commerce international. De courts essais ont été préparés sur trois autres thèmes – l’utilisation de l’analyse économique quantitative dans le règlement des différends à l’OMC, le commerce international des services de transport aérien et les délocalisations de services.

The geographical fragmentation of production has created a new trade reality. Often referred to as global value chains or vertical specialization, this fragmentation deepens the interdependency of trade relations and has many implications for how we understand trade policy. This book sheds light on the nature of this interdependency, and the contribution of trade to national economies. It illustrates the conjunction of technical, institutional and political changes that led to the emergence of production and trade networks in East Asia, including their impact on trade patterns.

This chapter sheds further light on the linkages between trade reforms, integration into the world economy and the size of the informal economy. It presents an empirical analysis based on a new database that regroups information on the incidence of informality and the size of the shadow economy. The chapter aims to clarify the multifaceted nature of the globalization process and its implications for labour markets in developing countries. It starts by describing the main questions that arise from the discussion in the previous chapters. It then provides an overview of the empirical material and the methodology used before presenting the results.

The process of globalization has furthered economic growth and development in many cases, but concerns have been expressed as to its sustainability from a social point of view. There are indications that in developed countries, globalization has increased inequality of labour-market outcomes. While some developing countries have managed to take advantage of the opportunities created by the globalization process, others have not. This chapter discusses the role of education and skill policies in helping individuals and societies profit from globalization, thereby increasing the social sustainability of the globalization process.

Many unskilled labour-intensive production tasks began to be offshored by advanced country firms to developing countries, where low-cost but relatively unskilled labour imparted a comparative advantage, essentially in final assembly operations, combined with institutions that could absorb firm-specific technological know-how. This profitable international production fragmentation became feasible with the onset of the information and communications technology (ICT) revolution, which enabled the coordination of spatially dispersed complex tasks at a relatively low cost. The growth of global supply chains has changed the distribution of incomes across countries. Participation in these supply chains, initiated by the successful completion of low value-added manufacturing tasks, contributed to industrialisation and high rates of economic growth in several Asian developing economies. The process of catch-up with developed economies is likely to get stronger as many of these countries seek to move up the value chain through their exposure to advanced technologies (made available by the offshoring process) and build up human capital. At the same time, the continued exclusion of several developing economies from global supply chains, such as those in Africa, means that the gap among countries in the developing world could widen. The international fragmentation of production has also affected the distribution of incomes within countries. In advanced economies, the direct, negative effect of production fragmentation on employment and wages for lowand semi-skilled workers is the primary concern. In developing economies, production fragmentation is likely to create jobs for a large pool of unskilled labour. However, because a relatively unskilled activity in a developed economy may be a relatively skilled one in a developing economy, offshoring may increase the demand for (and returns on) skilled labour among developing economies. These distribution effects, both across and within countries, are likely to affect trade policy, and consequently, the evolution of supply chains.

Cette section a pour objet d’aider le lecteur à mieux comprendre deux questions jumelles, à savoir pourquoi les pouvoirs publics ont recours à des subventions et quels sont les effets des subventions sur le commerce international. Comme c’est souvent le cas dans l’analyse économique, le point de départ de ce qui suit est une économie “de référence“ dans laquelle les marchés sont parfaitement compétitifs. Cette approche permet d’obtenir des indications générales sur l’incidence de mesures d’intervention telles que les subventions. Comme on l’explique plus loin, dans un marché parfaitement compétitif, rien ne peut justifier une subvention. Dans le cadre d’un marché parfait, l’introduction d’une subvention ou d’une autre mesure gouvernementale serait inefficace et réduirait le bien-être. Mais si l’on assouplit l’hypothèse du marché parfait, il peut y avoir des cas où une mesure telle qu’une subvention accroît le bien-être. Une subvention efficace peut remédier à une défaillance du marché et équilibrer les coûts et les avantages sociaux et privés.

Indonesia has been regarded as one of the success stories of developing countries escaping the resource curse (Rosser, 2004; 2007). In many developing countries, instead of becoming a source of economic growth, abundant natural resources have been associated with stagnant growth, a condition known as the resource curse or the paradox of plenty. As argued by Sachs and Warner (1997), economies with abundant natural resources have tended to grow less rapidly than those with scarce natural resources. Similarly, the resource curse has been defined as “the phenomenon whereby a country with an export-driven natural resources sector, generating large revenues for government, leads paradoxically to economic stagnation and political instability” (ODI, 2006). This chapter will review the efforts undertaken by Indonesia to diminish its dependency on natural resources and to better connect to global value chains (GVCs).

Le monde est en constante évolution, porté par les innovations technologiques qui influent sur notre façon de vivre et de faire des affaires. L’histoire de l’économie mondiale est intimement liée aux progrès technologiques. L’invention de la machine à vapeur a conduit à la mécanisation de la production, la découverte de l’électricité a permis la production de masse et, grâce à l’essor d’Internet, il est devenu possible de coordonner à distance les différentes étapes de la production, ce qui a entraîné la fragmentation de la production et l’apparition des chaînes de valeur mondiales.

The world economy expanded by 3.3 per cent in 2005, less rapidly than in 2004, but still slightly faster than the decade average. Economic growth remained strong in most regions although less buoyant than in the preceding year. Only Europe’s economy continued to record low GDP growth – less than half the rate observed in North America. In contrast to Europe, Japan experienced a strengthening of economic activity. In light of slower economic growth worldwide in 2005 and of oil market developments, merchandise trade growth – like GDP growth – decelerated in real terms, but still exceeded the average for the last decade.

En general, los servicios no se tienen suficientemente en cuenta en los debates sobre el comercio mundial, aunque representan la mayor parte del comercio en muchas economías desarrolladas y están creciendo con rapidez en numerosas economías en desarrollo. Esa menor atención se debe tal vez a que los servicios son menos tangibles, y las cuestiones relacionadas con el comercio de servicios suelen ser más complejas. Por ello, el presente Informe trata de desmitificar el comercio de servicios. Su objetivo es arrojar nueva luz sobre esa parte esencial del comercio mundial, ofrecer una descripción detallada del comercio de servicios en la actualidad y examinar de qué forma podría evolucionar en los próximos años, sobre todo a medida que las nuevas tecnologías hacen que algunos servicios sean cada vez más comerciables.

Supply chains and trade policy are tightly linked to each other. Trade distorting effects of tariff and non-tariff barriers (which are levied on the gross value of imported goods, rather than value-added) are magnified in global supply chains; it takes many more cross-border transactions to provide a single unit of a final good than before. Global supply chains create new forms of cross-border spillover effects and have therefore generated a demand for deep forms of integration, which could make productionsharing activities less vulnerable to disruptions or restrictions. For instance, it is not possible to disentangle merchandise trade from services trade, and standards may need to be stipulated to make each stage of production compatible with the other. At present, “deep” provisions in international trade agreements – covering the areas of services, investment, competition policy and intellectual property, among others – are largely found at the regional level. “Deep” RTAs, in turn, may stimulate the further proliferation of global supply chains if they cover a sufficient number of economies and do not introduce distortions with third countries. However, the wild and tangled growth of RTAs and stringent rules of origin have created problems (“spaghetti bowl” trade). To the extent that RTAs are consolidated and gradually multilateralised, they might prove a useful step to achieving the first-best solution of multilateral trade liberalisation that goes beyond tariff reduction. Examples can be found in the field of technical barriers to trade, trade facilitation, the opening of markets for trade in services and the presence of contingency measures within trade commitments. The multilateral trading system faces the challenge of addressing the need for trade integration between countries while preserving non-discrimination between regulatory regimes.

El comercio internacional de combustibles y productos farmacéuticos ha crecido por encima de la media en los últimos años, afectando a la estructura de las corrientes mundiales del comercio de mercancías. A continuación se examinan estos aspectos.

The 2010 World Trade Report examines trade in natural resources. This is a topic of growing importance in international trade relations. Natural resources are at the root of much economic activity, they are a key component of many economies, and their share in world trade is growing. A number of features exclusive to natural resources explain why they occupy a special place in economic, political economy and policy analysis.

El Informe sobre el Comercio Mundial ha sido redactado bajo la supervisión general de Patrick Low, Director de la División de Estudios Económicos y Estadística. Los autores principales del Informe son Bijit Bora, K. Michael Finger, Marion Jansen, Alexander Keck, Patrick Low, Hildegunn Nordas, Roberta Piermartini y Robert Teh. Las estadísticas comerciales y la información arancelaria fueron facilitadas por el grupo de estadística de la División de Estudios Económicos y Estadística, bajo la coordinación de Guy Karsenty, Julia de Verteuil, Andreas Maurer y Jürgen Richtering.

Where are the legal roots of WTO Accession Protocols? How much was carried over from the General Agreement on Tariffs and Trade standard and practice? What customary practice governs the preparation and approval of accession decisions and protocols? What is the current substantive standard and basic architecture of Accession Protocols? Are there unique provisions in Accession Protocols that have emerged in twenty years of WTO accession history? To what extent do Accession Protocols come into play in the context of WTO dispute settlement? By comparing the empirical data contained in the WTO Accession Protocols with preceding GATT Accession Protocols, this chapter offers waterfront coverage of WTO Accession Protocols from the GATT baseline. The chapter shows that, although rooted in its GATT predecessor base, and remarkably consistent over time, some unique provisions have been incorporated into the architecture of the WTO Accession Protocols since 1995. Because Accession Protocols become integral parts of WTO Agreement after they come into force, the chapter argues that the specific ‘terms and conditions of accession’ in WTO Accession Protocols have had a direct and salutary impact on the entirety of the WTO Agreement through its tightened safeguard and upgrade. The chapter concludes by arguing that the evidence suggests that the WTO Agreement has been expanded by the absorption of the Accession Protocols over the course of the last twenty years, and that the effect on the WTO Agreement has been significant, rather than marginal.

En una parte anterior del Informe hemos examinado los argumentos económicos a favor y en contra de distintos tipos de subvenciones. El análisis económico nos indica que a veces las subvenciones permiten subsanar eficientemente diversos tipos de deficiencias del mercado. También nos indica que las subvenciones pueden distorsionar las corrientes comerciales si otorgan una ventaja competitiva artificial a los exportadores o a las ramas de producción que compiten con las importaciones. Que una subvención se considere como una intervención deseable para corregir una deficiencia del mercado o como una distorsión del comercio no deseable a veces depende de quién emite el juicio. Sin embargo, el análisis económico debería poder ayudar a determinar la conveniencia de una intervención desde la perspectiva de bienestar social y a evaluar las ventajas de otras formas de intervención. No obstante, los gobiernos pueden conceder ciertos tipos de subvenciones que guardan escasa relación con consideraciones de eficiencia, y en esos casos el análisis económico basado en un simple análisis del bienestar social resulta de poca utilidad. Además, en estos casos, es probable que el análisis sea más útil para asegurar que quienes adoptan políticas conozcan los costos que conlleva perseguir determinados objetivos, y los costos de otras formas menos costosas de alcanzarlos. También sabemos que las decisiones sobre lo que se va a subvencionar, en qué cuantía y por cuánto tiempo entrañan complejos aspectos técnicos respecto de los cuales es frecuente que los gobiernos no tengan información suficiente.

Au cours des trois dernières décennies, le monde a connu une intégration croissante. La part du commerce des marchandises dans le produit intérieur brut (PIB) est passée d’environ 43% en 1995 à près de 60% en 2017. Les droits de douane ont progressivement diminué à partir de l’établissement de l’Accord général sur les tarifs douaniers et le commerce (GATT) en 1948, puis des mesures de libéralisation unilatérale et huit cycles de négociations multilatérales ont fortement réduit les droits de douane appliqués par les Membres de l’Organisation mondiale du commerce (OMC). Les taux NPF (nation la plus favorisée) appliqués, supérieurs à 10% en 1995, se situaient en 2017 juste au-dessus de 7% (graphique 1.1). D’une manière générale, les pays qui sont ouverts au commerce international enregistrent une plus forte croissance, innovent, augmentent leur productivité et offrent à leur population des revenus plus élevés et des perspectives élargies.

In 2011, a popular revolution occurred in Yemen, leading to the formation of the government which brought the accession process to its conclusion in 2014, following years of long and complex negotiations. From the beginning, Yemen’s accession process was envisaged not as an end in itself, but as a means to achieve other, more imperative, objectives, including poverty reduction, decreasing levels of chronic unemployment and raising levels of sustained development to meet the needs of a rapidly growing population. This chapter gives an account of the accession process, focusing on the positive effects of Yemen’s accession to the WTO, both as a catalyst for long sought-after domestic reform and as a useful and convenient path to reach higher levels of reform for which the accession process acted as a spur. The aspiration was to create a competitive business environment that would lead to efficient resource allocation and ultimately boost output and productivity as well as increasing the well-being of the populace and reaping the benefits of WTO membership. Joining the WTO does not mark the end of the reform process. There is work post-accession to establish and strengthen different institutions to exercise the benefits of WTO membership for Yemen.

Foreign direct investment and trade are increasingly interlinked due to the deepening integration of trade and production networks. Today, there is an ever-increasing percentage of imports in a country’s production. Responding to this increase, some countries have sought to limit the percentage of imports in their production by requiring that foreign investors use locally produced inputs, as an aspect of implementing priorities in development plans and/or strategic industrial policy. These policies and priorities have also been complicated and exacerbated by protectionism, whereby countries discriminate blatantly in order to promote local industries with policies that grant more favours to local producers and/or products and materials. All these practices impact negatively on international trade by distorting the conditions for fair competition. Although different rules have been developed at an international level to streamline these practices, currently there is no single comprehensive framework to govern them at the multilateral level. Despite this, WTO members, through accessions, have negotiated with acceding governments to refine and improve extant investment-related rules in the WTO. This chapter argues that WTO-specific outcomes, as in deposited Accession Protocols, have contributed to improving significantly the predictability of the investment regulatory laws and policies of Article XII members, reinforcing existing investment-related rules on trade in goods and services, and enhancing the business-friendliness of WTO rules and the relationship with the private sector (including through expanded opportunities for investment), by binding, for example, their status quo policies and rules, and accession-specific obligations codified in domestic law and regulation.

El comercio y la tecnología están estrechamente relacionados. Desde la invención de la rueda hasta el hallazgo del ferrocarril o la aparición de los contenedores, la tecnología ha desempeñado siempre un papel clave en la configuración del comercio, y este fenómeno se está produciendo hoy a una velocidad sin precedentes. Estamos viviendo una era de cambios tecnológicos desconocidos hasta ahora, y las distintas innovaciones propiciadas por Internet podrían tener importantes repercusiones. La “Internet de las cosas”, la inteligencia artificial, la impresión 3D y las cadenas de bloques (blockchain), por ejemplo, pueden cambiar en gran medida cómo se comercia, quiénes comercian y qué se comercia.

Les subventions sont l’un des nombreux instruments de politique assujettis à des règles dans le système commercial multilatéral, mais elles soulèvent des questions plus complexes pour les responsables politiques que beaucoup d’autres instruments soumis aux règles du GATT/de l’OMC. Cela tient en partie à ce qu’elles peuvent être définies de différentes manières. Cela tient aussi à ce qu’elles sont employées pour atteindre des objectifs très divers. Même lorsqu’elles ne visent pas le commerce, elles peuvent influer sur les courants commerciaux. Les types de subventions dont traite le présent rapport sont essentiellement celles qui confèrent un avantage à certains producteurs nationaux et ont de ce fait un effet sur le commerce. La tâche complexe consistant à déterminer quelles sortes de subventions posent des problèmes du point de vue du système commercial et ce qui peut être fait pour y remédier occupe une place importante dans le programme d’activités de l’OMC /du GATT.

As the world becomes increasingly integrated, it becomes less and less possible for different policy areas to be handled independently of each other. The linkage between trade and health has been the focus of much debate: real concerns should be dealt with and any misunderstandings should be clarified based on sound evidence and rigorous analysis.