Economic research and trade policy analysis
Foreword
The global economy is going through unprecedented times. The COVID-19 pandemic has shaken the world threatening the lives and livelihoods of millions of people in both developed and developing economies with a particularly devastating impact on small businesses. World trade plummeted in the first half the year and despite signs of trade bouncing back WTO estimates in October 2020 still forecast a 9.2 per cent decline in the volume of world merchandise trade for 2020.
Aspects économiques de l’impact des technologies numériques sur le commerce
La présente section examine comment les nouvelles technologies transforment le commerce international créant de nouvelles possibilités d’établir un système commercial plus inclusif et soulevant de nouveaux défis. Elle analyse d’abord l’influence des technologies numériques sur les coûts du commerce international. Puis elle examine comment ces technologies modifient ce qui est échangé par qui et comment. Enfin l’impact potentiel des grandes tendances de l’évolution technologique est quantifié et des projections à long terme concernant le commerce international sont faites au moyen du Modèle du commerce mondial de l’OMC.
International trade in air transport: Recent developments and policy issues
Air transport like other transport services is associated with international trade in two distinct ways. First air transport is traded as a service in its own right. Second it is a key intermediate service for many other kinds of trade in the domain of both goods and services (such as tourism). Numerous studies have highlighted the importance of an efficient effective and reliable air transport infrastructure especially in developing countries to ensure the materialization of the gains from trade (WTO 2004). These studies also highlight the important role of international civil aviation in contributing to the development process and its role in the leisure and commercial decisions of many people. This importance is expected to increase as a result of technological innovation deregulation and enhanced market access for foreign companies which are all making air transport more accessible to a wider set of customers in a broader range of countries.
Introduction
Over the last few decades the internet has entered every corner of our lives from social interactions to entertainment and work and has fundamentally reshaped our economies slashing the cost of acquiring and trading information. It has fuelled the digital revolution fundamentally changing the ways in which we communicate consume and produce and it has profoundly transformed international trade in terms of what we trade how we trade and who is trading.
Foreword by the Director-General
This year’s World Trade Report explores the role of trade in a world characterized over the last several decades by increasing dependence among nations. This inter-dependency – what we all call globalization today – is a multi-layered and complex phenomenon involving intensive political social and economic interaction nationally and internationally. Few would contest the benefits that globalization has brought in terms of greater prosperity for hundreds of millions as well as greater stability among nations. But many individuals in different societies across the world have shared little or not at all in the benefits of globalization. The challenges facing national governments in managing globalization are formidable and success in spreading prosperity more widely requires a strong common purpose.
Algunos objetivos declarados por los gobiernos para la utilización de subvenciones
En esta Sección se examinan los principales objetivos que alegaron los gobiernos para seguir concediendo subvenciones entre otros el desarrollo industrial la innovación y la ayuda a las grandes empresas nacionales la protección del medio ambiente y la redistribución. En la categoría general de “redistribución” se examinan tres objetivos más específicos: la utilización de subvenciones para fines de política regional el apoyo a ramas de producción en decadencia para el ajuste y las obligaciones de servicio universal. Esta selección no pretende ser exhaustiva pero comprende algunos de los objetivos más importantes que tratan de alcanzar los gobiernos de los países en desarrollo y desarrollados.
Executive summary
This report deals with the relevant WTO Agreements and the way they may influence health and health policies. In undertaking this joint study the WHO and WTO Secretariats seek to examine the linkages between trade and health policies so as to enable both trade and health officials to better understand and monitor the effects of these linkages.
Responding to trade-related changes in skills demand
In recent decades global and regional trade policies have helped less developed countries in pursuing comparative advantages in higher-productivity activities and in exploiting these to drive development raise income levels and give workers a better standard of living. Skills development has had and continues to have an important enabling role in this process.
The economics of how digital technologies impact trade
This section focuses on how new technologies are transforming international trade creating new opportunities for a more inclusive trading system and raising new challenges. The section opens with a discussion of how digital technologies affect international trade costs. This is followed by an assessment of how digital technologies change the nature of what is traded how we trade and who trades what. Finally the potential impact of important trends in technological development is quantified and long-term projections on international trade are made using the WTO Global Trade Model.
Acknowledgments
The Global Value Chain Development Report 2021 the third in the series draws on contributions from 25 background papers presented and discussed at the First Authors’ Workshop for the Global Value Chain Development Report 2021 during 8–9 October 2020. The drafts of the report’s six chapters were presented at the Chapter Authors’ Workshop for the Global Value Chain Development Report 2021 during 26–28 May 2021 (Appendix). The Asian Development Bank (ADB) organized both online workshops. The editors thank the authors of these papers and the chapters and the discussants and participants at the two workshops for their insightful comments and suggestions.
Los efectos del comercio en el funcionamiento del mercado de trabajo
En esta sección se examinan datos empíricos sobre los efectos del comercio en los salarios y el empleo y se plantean las siguientes cuestiones cruciales: ¿qué datos hay sobre la repercusión de la competencia de las importaciones y la deslocalización en los salarios y el empleo? ¿Cómo afectan al empleo un mayor acceso a los mercados de exportación y el abaratamiento de los insumos importados? ¿Cómo pueden compaginarse datos empíricos heterogéneos de diferentes países? ¿Cómo afecta la naturaleza del mercado de trabajo a los resultados? ¿De qué magnitud son los costos de ajuste a los cambios ligados al comercio? Esta sección se centra en particular en los salarios y el empleo porque la investigación sobre otros aspectos del mercado de trabajo como la estabilidad y la seguridad en el empleo está mucho menos avanzada debido a la falta de datos nacionales lo que impide examinar la incidencia del comercio y la tecnología sobre estas otras variables.
Aid for Trade and building trade capacity: The case of Morocco
The aim of this chapter is to examine the broad framework which has been evolved for the reception of Aid for Trade (AFT) in Namibia. The economic situation before this period included the prevalence of poverty the HIV/AIDS pandemic low educational opportunities and a very highly skewed or unequal distribution of the wealth of the country which has increased income inequalities and unsustainable economic growth as outlined in Namibia Vision 2030 (Namibia Office of the President 2004). In this regard Namibia shares this economic dependency at the regional level and most trade and economic relationships are mainly with Botswana Lesotho Swaziland and South Africa all of which are members of the Southern African Customs Union (SACU) and Southern African Development Community (SADC). The objective is to create a free trade area in the Southern Africa region.
WTO Accessions and Trade Multilateralism
What have WTO accessions contributed to the rules-based multilateral trading system? What demands have been made by original WTO members on acceding governments? How have the acceding governments fared? This volume of essays offers critical readings on how WTO accession negotiations have expanded the reach of the multilateral trading system not only geographically but also conceptually clarifying disciplines and pointing the way to their further strengthening in future negotiations. Members who have acceded since the WTO was established now account for twenty per wto_cent of total WTO membership. In the age of globalization there is an increased need for a universal system of trade rules. Accession negotiations have been used by governments as an instrument for domestic reforms and one lesson from the accession process is that there are contexts which lead multilateral trade negotiations to successful outcomes even in the complex and multi-polar twenty-first-century economic environment. The contributions in this volume illuminate the pressing question regarding why some trade negotiations fail some stall and others succeed.
Some stated objectives of governments for using subsidies
This Section discusses the main objectives governments claim to pursue with subsidies including industrial development innovation and support for national champions environment related objectives and redistribution. Under the broad category “redistribution” three more specific objectives are examined: the use of subsidies for regional policy purposes adjustment support for declining industries and universal service obligations. This selection does not pretend to be exhaustive but it covers some of the most important objectives pursued by governments in developing and developed countries.
Understanding Supply Chain 4.0 and its potential impact on global value chains
The reorganization of supply chains using advanced technologies such as the Internet of Things (IoT) big data analytics and autonomous robotics is transforming the model of supply chain management from a linear one in which instructions flow from supplier to producer to distributor to consumer and back to a more integrated model in which information flows in an omnidirectional manner to the supply chain. While e-commerce is uniquely suited to many of these techniques they also hold the promise of improving efficiency in brick-and-mortar stores. These technologies are generating enormous benefits through reducing costs making production more responsive to consumer demand boosting employment (employment in supply chain sectors where such technologies are most likely to be applied has grown much more rapidly than in other supply chain sectors and in the economy as a whole) and saving consumers’ time. The impact of these technologies on the length of supply chains is uncertain: they may reduce the length of supply chains by encouraging the reshoring of manufacturing production to high-income economies thus reducing opportunities for developing countries to participate in GVCs or they may strengthen GVCs by reducing coordination and matching costs.
El comercio en un mundo en proceso de globalización
La integración económica avanza en todo el mundo a un ritmo sin precedentes. La globalización ha reportado ingentes beneficios a muchos países y ciudadanos pero algunos han salido perdiendo en el proceso y está creciendo por muchas razones la oposición a una mayor integración. El comercio es solamente un aspecto de la globalización y los nexos con los elementos económicos políticos y tecnológicos más generales son múltiples y complejos. Algunos argumentos contrarios al comercio abierto son alimentados por distintos factores -incluido un temor general a los cambios- que poco tienen que ver con una mayor apertura del comercio. Los gobiernos que tratan de responder a las presiones contra el comercio basadas en los argumentos opuestos a la globalización corren el riesgo de equivocarse al decidir sus políticas. Sin duda el escepticismo frente al comercio es motivo de preocupación particularmente ahora que los Miembros de la OMC están tratando de culminar la Ronda de Doha. En este momento crucial parece conveniente volver a considerar los argumentos en favor del comercio y preguntarnos si los argumentos tradicionales favorables al libre comercio siguen siendo válidos.
A world of opportunities and challenges
Research published by the European Parliament in 2017 claimed that Blockchain could “change our lives” (Boucher 2017). What the various blockchain applications that are being developed in areas as diverse as trade finance trade facilitation trade in services intellectual property and government procurement show is that Blockchain has the potential to impact both the traders and the government agencies involved in international trade significantly. Opportunities are multifaceted but will only be realized if several key challenges are addressed.
Integrating small African economies into global value chains through foreign aid: The case of Namibia
The aim of this chapter is to examine the broad framework which has been evolved for the reception of Aid for Trade (AFT) in Namibia. The economic situation before this period included the prevalence of poverty the HIV/AIDS pandemic low educational opportunities and a very highly skewed or unequal distribution of the wealth of the country which has increased income inequalities and unsustainable economic growth as outlined in Namibia Vision 2030 (Namibia Office of the President 2004). In this regard Namibia shares this economic dependency at the regional level and most trade and economic relationships are mainly with Botswana Lesotho Swaziland and South Africa all of which are members of the Southern African Customs Union (SACU) and Southern African Development Community (SADC). The objective is to create a free trade area in the Southern Africa region.
A historical perspective on regionalism
This chapter explores the development of regionalism from a historical perspective with a view to understanding how the world ended up with some 350 regional trade agreements (RTAs) (so far) of varying degrees of coverage complexity and efficacy. Understanding the history of regionalism may shed light on how to multilateralize it; and an understanding of the factors that led nations to conclude trade agreements outside the multilateral trading system may help to identify some lessons for dealing with the increasing proliferation of RTAs.
The Republic of Korea’s Trade Adjustment Policies and their Effects on Labour Market Adjustment
The Republic of Korea (hereafter Korea) has been actively opening its markets since the early 1990s making its first bilateral trade agreement with Chile effective from 3 April 2004. It has since arranged such agreements with 52 countries that now cover more than 77 per cent of the world’s GDP. Given the little progress made in multilateral negotiations under the Doha Development Agenda (DDA) much of the progress in market liberalization has taken the form of regional trade agreements (RTAs). It has been through an extensive network of these arrangements with partners such as the EU the US and the People’s Republic of China (hereafter China) that the Korean Government has been pursuing sustained growth.
Remerciements
Le Rapport sur le commerce mondial a été rédigé sous la supervision de Kipkorir Aly Aza Rana Directeur général adjoint. Patrick Low Directeur de la Division de la recherche économique et des statistiques a dirigé l’équipe chargée de la rédaction. Ses principaux auteurs sont Bijit Bora Zdenek Drabek K. Michael Finger Marion Jansen Alexander Keck Patrick Low Hildegunn Kyvik Nordås Roberta Piermartini et Robert Teh. Barbara d’Andrea de la Division de la recherche économique et des statistiques est coauteur de la section IB. Jeffrey Gertler de la Division des affaires juridiques a contribué à la rédaction de la section IB. Mukela uanga de la Division de la recherche économique et des statistiques a fourni une précieuse assistance à certains des auteurs principaux. Les données sur le commerce et les informations sur les droits de douane ont été fournies par les statisticiens de la Division de la recherche économique et des statistiques dont les travaux ont été coordonnés par Guy Karsenty Julia de Verteuil Andreas Maurer et Jürgen Richtering.
The facilitation of trade by the rule of law: The cases of Singapore and ASEAN
Geography is unkind. This could be a result of historical accident wars or colonial boundaries but the results are the same. The classical definition of the factors of production is land labour and capital. It is a fact of life that some countries have a limited supply of all three.
Tendances récentes du commerce international
En 2005 l’économie mondiale a progressé de 33 pour cent taux plus faible qu’en 2004 mais quand même légèrement supérieur à la moyenne de la décennie. Dans la plupart des régions la croissance économique est restée vigoureuse bien qu’elle ait été moins forte que l’année précédente. Seule l’Europe a encore enregistré une faible croissance du PIB – inférieure de plus de moitié au taux observé en Amérique du Nord. Au Japon en revanche l’activité économique s’est raffermie. Compte tenu du ralentissement de la croissance économique mondiale en 2005 et de l’évolution du marché pétrolier la croissance du commerce des marchandises – comme celle du PIB – s’est ralentie en termes réels tout en restant supérieure à la moyenne des dix dernières années.
Acknowledgements
The World Trade Report 2006 was prepared under the general direction of Deputy Director-General Alejandro Jara. Patrick Low Director of the Economic Research and Statistics Division led the team responsible for writing the Report. The principal authors of the Report were Marc Bacchetta Bijit Bora K. Michael Finger Marion Jansen Alexander Keck Clarisse Morgan Roberta Piermartini and Robert Teh. Trade statistics information was provided by the Statistics Group of the Economic Research and Statistics Division coordinated by Guy Karsenty Julia de Verteuil Andreas Maurer and Jürgen Richtering.
Le commerce des services en chiffres
La présente section montre l’importance du commerce des services dans l’économie mondiale en s’appuyant sur un ensemble de données expérimental établi par l’OMC appelé TISMOS (Trade in Services by Modes of Supply – Données sur le commerce des services par mode de fourniture). Cet ensemble de données rend compte des services fournis selon les quatre modes définis dans l’Accord général sur le commerce des services (AGCS) de l’OMC; les statistiques traditionnelles sur le commerce des services ne portent que sur trois des quatre modes de fourniture de l’AGCS. La présente section traite aussi de la participation des économies en développement y compris les pays les moins avancés (PMA) de l’importance des micro petites et moyennes entreprises (MPME) et du rôle des femmes dans le commerce des services. Enfin elle étudie la part de valeur ajoutée des services dans les chaînes de valeur mondiales.
Acknowledgements
The World Trade Report 2010 was prepared under the general direction of the Deputy Director-General Alejandro Jara and supervised by Patrick Low Director of the Economic Research and Statistics Division. The principal authors of the Report were Marc Bacchetta Cosimo Beverelli John Hancock Alexander Keck Gaurav Nayyar Coleman Nee Roberta Piermartini Nadia Rocha Michele Ruta Robert Teh and Alan Yanovich. Other written contributions were provided by Marc Auboin Mireille Cossy and James Windon. Trade statistics information was provided by the Statistics Group of the Economic Research and Statistics Division coordinated by Hubert Escaith Julia de Verteuil Andreas Maurer and Jurgen Richtering.
Acknowledgements
The World Trade Report 2008 was prepared under the general direction of Deputy Director-General Alejandro Jara. Patrick Low Director of the Economic Research and Statistics Division led the team responsible for writing the Report. The principal authors of the Report were Marc Bacchetta Chad Bown K. Michael Finger Marion Jansen Alexander Keck Roberta Piermartini Michele Ruta and Robert Teh. Trade statistics information was provided by the Statistics Group of the Economic Research and Statistics Division coordinated by Hubert Escaith Julia de Verteuil Andreas Maurer and Jürgen Richtering.
Introduction
The last two decades have seen an explosion of regional trade agreements some of them involving several countries many of them bilateral. Some have been local within regions others have stretched across regions. Some have involved deep integration going beyond the WTO while others have been quite light and superficial. All in all some 350 of these agreements exist.
Economic resilience: Dynamics of informality
Informality is associated with increased vulnerability of countries to economic shocks. At the same time informality raises the likelihood of being affected by (external) shocks. The combination of these two tendencies can create a vicious circle weakening the long-term performance of a country lowering the potential benefi ts it can derive from trade and reducing economic well-being. This chapter discusses how informal employment evolves over the cycle – differentiating among different segments of informal labour markets – and the consequences for economic resilience to shocks. It presents evidence of the extent to which informal economies increase volatility in growth performance and the frequency of extreme economic events. Moreover the chapter discusses the particular interaction between international capital fl ows and labour market informality in worsening a country’s vulnerability to shocks. It emphasizes the potentially adverse effects of offi cial development aid and international investment by multinationals within global production networks.
Aspects du commerce et des politiques commerciales
Considéré comme un moyen de réduire la dépendance des pays en développement vis-à-vis des marchés des pays développés et de diversifier les exportations du Sud au-delà des seuls produits primaires le commerce Sud-Sud est depuis longtemps encouragé. Pour l’essentiel les mécanismes mis en place en vue de favoriser la coopération entre pays en développement ont pris la forme d’arrangements sous-régionaux ou régionaux de nature souvent préférentielle. Durant les années 50 et 60 la promotion du commerce Sud-Sud s’est inscrite bien souvent dans un ensemble de mesures ancré dans une stratégie qui visait à substituer aux importations des productions nationales protégées par des obstacles au commerce élevés. Le commerce Sud-Sud a progressé par à-coups car les économies en développement alternaient alors les phases d’expansion et de repli. En dépit des efforts déployés pour promouvoir et diversifier le commerce Sud-Sud les flux de produits primaires sont restés prédominants dans la plupart de ces régions et ce commerce Sud-Sud ne représentait que 65 pour cent du commerce mondial en 1990.
Energy-related rules in Accession Protocols: Where are they?
Energy issues have not been systematically discussed by WTO members in the multilateral trading system. This is owing to the fact that there is no rule on energy per se in WTO agreements. Yet all tradable energy goods and services are covered by the General Agreement on Tariffs and Trade 1994 and the General Agreement on Trade in Services respectively. With energy security and climate change high on the global agenda there is increasing interest in how to deal with energy-related issues during WTO accession negotiations particularly given that several energy-producing countries energy-transit countries and energy-consuming countries are currently in accession negotiations. Following the examples of earlier accessions the ongoing negotiation dossiers would need to negotiate energy-related specific obligations in their terms of accession. This chapter identifies five key themes relating to energy in the WTO Accession Protocols of the Article XII members and explains the rationale of how these topics relate to trade in energy based on the existing WTO rules. Further it categorizes similar energy patterns and trends for Article XII members. Finally the chapter draws lessons for future WTO rule-making by arguing that these ‘updated’ rules on energy found in Article XII members’ Accession Protocols will have the potential to guide the envisaged regular work of the WTO on future rule-making on trade in energy thereby contributing to international energy cooperation in the context of the rules-based multilateral trading system.
Acknowledgements
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 William Castro of the WTO’s Young Professionals Programme for his contributions to the processing of the data and preparation of the one-page case summaries to WTO staff members Jesse Kreier and Olga Falgueras Alamo from the Rules Division for their contribution to the compilation of relevant documents and to Jesse Nicol from the Appellate Body Secretariat for his comments. The authors are also grateful to Laoise Ní Bhriain Maria Bressi and Bryson Strupp from the Archives Section of the WTO Information Management Services for their active collaboration in checking the archives and identifying relevant information and to Tan Albayrak intern at the Legal Affairs Division for assisting in the final editing of the onepage case summaries.
Introduction
Le formidable dynamisme de l’économie mondiale depuis un quart de siècle s’est accompagné de profonds bouleversements ce qui n’est guère surprenant dans la mesure où les deux phénomènes sont étroitement liés. L’économie mondiale ne prospère que si la productivité augmente ; et la productivité n’augmente que si l’économie mondiale produit plus et mieux de manière plus efficiente. Les préoccupations que la mondialisation suscite actuellement dans de nombreux pays peuvent être attribuées du moins en partie aux défis de l’ajustement économique liés à la croissance continue de la productivité dans l’économie mondiale. Le Rapport sur le commerce mondial 2017 s’intéresse à deux des moteurs les plus puissants du progrès économique mondial aujourd’hui la technologie et le commerce et examine comment ils influent sur les marchés du travail. Il analyse l’évolution des défis de l’ajustement au nouveau marché du travail et la manière dont les économies s’adaptent. Il examine en particulier les points communs et les différences dans la façon dont la technologie d’une part et le commerce d’autre part influencent le comportement du marché du travail.
Instituciones y asuntos de política
En esta sección se explica cómo funcionan en la práctica la normalización y la evaluación de la conformidad y se describen las características pertinentes de las infraestructuras de normalización y de evaluación de la conformidad en distintas regiones del mundo. Primero se hace un análisis del proceso de normalización y se estudia dónde se lleva a cabo la normalización cómo está organizada y quiénes participan en el proceso. La subsección 2 trata de la organización de la evaluación de la conformidad en los planos internacional regional y nacional y describe las formas en que los requisitos de evaluación de la conformidad pueden afectar al comercio.
Trade digitalization and financing: New hope for MSMES?
The International Finance Corporation (IFC) the SME Finance Forum and the World Bank Group estimate the entire MSME finance gap to be close to US$ 5 trillion hindering the ability of MSMEs to grow. This gap however is not due to a lack of available funds. A 2019 report by the International Trade Centre (ITC) indicated that “in 2018 global funds held US$ 1 trillion of cash-in-hand equity capital that was seeking investment opportunities”. Of particular concern is the trade finance gap which disproportionately affects MSMEs. Despite the low-risk nature of short-term trade finance the trade finance gap alone is estimated at upwards of US$ 1.5 trillion. The rejection rate of MSME proposals for trade finance is 45 per cent. According to the Asian Development Bank (ADB) “among MSMEs initially rejected that sought alternative financing 47 per cent were unable to find anything appropriate”; this does not include those firms that do not even apply for financing in the first place.
Standards in the multilateral trading system
This Section focuses on standards-related WTO legal texts and relevant jurisprudence. The Section begins with a discussion of the texts themselves. This is followed by a detailed discussion of some of the key concepts relevant to standards in the TBT and the SPS Agreements as well as GATT 1994. The Agreements are then placed in the context of the economic discussion presented in the previous Sections and reference is also made to accumulated standards-related jurisprudence. Since the focus of the Report is on product standards only WTO legal texts and jurisprudence bearing on “goods” will be discussed. It is important to note though that the General Agreement on Trade in Services (GATS) also contains standards-related provisions on services specifically in Article VI paras. 4 and 5.
Remerciements
Mes sincères remerciements vont à ma collègue Kenza Le Mentec pour ses précieux conseils. Mme Le Mentec m’a initiée au sujet et elle a apporté de précieuses contributions en particulier pour les sections techniques décrivant la technologie et pour la section sur la facilitation des échanges. Cette publication n’aurait pas été possible sans son soutien.
Avant-propos du Directeur Général
Le Rapport sur le commerce mondial de cette année examine le rôle du commerce dans un monde caractérisé depuis plusieurs décennies par l’interdépendance croissante des pays. Cette interdépendance appelée aujourd’hui mondialisation est un phénomène complexe aux multiples facettes qui implique une forte interaction politique sociale et économique aux niveaux national et international. Rares sont ceux qui contesteraient les avantages apportés par la mondialisation qui assure une plus grande prospérité à des centaines de millions de personnes et une plus grande stabilité entre les pays. Pourtant beaucoup de par le monde n’ont pas ou presque pas profité de ces avantages. La gestion de la mondialisation impose aux gouvernements nationaux des défis colossaux et pour réussir à diffuser plus largement la prospérité il faudra une forte détermination commune.
Conclusion
Research published by the European Parliament in 2017 claimed that Blockchain could “change our lives” (Boucher 2017). What the various blockchain applications that are being developed in areas as diverse as trade finance trade facilitation trade in services intellectual property and government procurement show is that Blockchain has the potential to impact both the traders and the government agencies involved in international trade significantly. Opportunities are multifaceted but will only be realized if several key challenges are addressed.