Information technology and e-commerce
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Defining innovation-oriented government policies and their evolution in the digital age
Since the 2008-09 financial crisis industrial employment in some economies has seen accelerated decline and international competition in mature industrial sectors has tightened; the evolution of productivity and wages has slowed; and a new economy enabled by digital technologies has emerged. In this context industrial and innovation policies have undergone renewal and these “new industrial policies” are reflecting a duality inherent to all government policy phases as they aim to address the difficult modernization of traditional industries while also aiming to bring about an adaptation of economies to digitalization.
Innovation policy, trade and the digital challenge
This section focuses on innovation policy and discusses its economic rationales and impact on innovation. For innovation to take place new knowledge has to be created through investment in research and it then diffuses through the education system or publications patents and interchange of ideas. When firms or governments instigate technological progress by using this knowledge or its embodiments via inventions to change processes behaviours or technologies economic growth may be affected depending on a number of variables. Within any country the diffusion of new technology depends on institutions the level of economic openness and investment in education and research.
International cooperation on innovation policies in the digital age
National innovation policies like other government policies serve domestic policy objectives. As discussed in Section C they can generate both positive and negative international spill-over effects and some of the mechanisms through which they generate spillovers involve trade. This section focuses on cooperation aimed at addressing the trade-related international spill-overs from innovation policies. Such cooperation could help to ensure that governments have the policy space to pursue innovation policies and could help to maximize the positive international spill-overs of such policies while minimizing their negative effects on trading partners.
Foreword
In the digital age a growing number of governments have adopted policies aimed at boosting growth through innovation and technological upgrading. The domestic economic fallout linked to the COVID-19 pandemic is leading countries to strengthen these policies. This report looks at these trends and at how trade and the WTO fit in. It shows that there is a significant role for international cooperation to make countries’ pursuit of such goals more effective while minimizing negative spill-overs from national policies.
Technical notes
WTO members are frequently referred to as “countries” although some members are not countries in the usual sense of the word but are officially “customs territories”. The definition of geographical and other groupings in this report does not imply an expression of opinion by the WTO Secretariat concerning the status of any country or territory the delimitation of its frontiers nor the rights and obligations of any WTO member in respect of WTO agreements. The colours boundaries denominations and classifications in the maps of the publication do not imply on the part of the WTO any judgement on the legal or other status of any territory or any endorsement or acceptance of any boundary.
Introduction
All over the world governments are actively and openly intervening in economies to boost innovation generate new technologies and foster cutting-edge industries. These interventions can have positive or negative impacts especially in today’s hyper-connected global economy. On the one hand they can expand knowledge enhance productivity and spread the essential tools of global growth and development. But on the other hand they can also distort trade divert investment and benefit one economy at the expense of others. International cooperation and rules are needed more than ever to ensure that governments’ new focus on innovation and technology policies maximizes positive spill-overs and minimizes negative ones – and to ensure that a race for technological leadership does not morph into a struggle for technological dominance. The 2020 World Trade Report looks at the role of innovation and technology policies in an increasingly digitalized world economy and explains the role of the WTO in this changing context.
Executive summary
In the digital age a growing number of governments have adopted policies aimed at boosting growth through innovation and technological upgrading. The domestic economic fallout linked to the COVID-19 pandemic is leading countries to strengthen these policies. This report looks at those trends and at how trade and the WTO fit into them. It shows that international cooperation could play a significant role in making countries’ pursuit of such goals more effective while minimizing the negative spill-overs from national policies.
World Trade Report 2020
In the digital age a growing number of governments have adopted policies aimed at boosting growth through innovation and technological upgrading. The World Trade Report 2020 looks at these trends and at how trade and the WTO fit with them. A defining feature of government policies adopted in recent years has been their support of the transition towards a digital economy. Trade and trade policies have historically been important engines for innovation. In particular the multilateral trading system has contributed significantly to the global diffusion of innovation and technology by fostering predictable global market conditions and by underpinning the development of global value chains. As data become an essential input in the digital economy firms rely more on intangible assets than on physical ones and digital firms are able to reach global markets faster without the amount of physical investment previously necessary in other sectors. Success in the digital economy will depend on openness access to information and communication technology (ICT) goods and services collaboration on research projects and the diffusion of knowledge and new technology. The World Trade Report 2020 shows that there is a significant role for international cooperation to make the pursuit of digital development and technological innovation more effective while minimizing negative spill-overs from national policies. The WTO agreements reached a quarter of a century ago have proved to be remarkably forwardlooking in providing a framework that has favoured the development of ICT-enabled economies across all levels of development. Further international cooperation at the WTO and elsewhere would enable continued innovation and reduce trade tensions to help international markets function more predictably.
Acknowledgements and Disclaimer
The World Trade Report 2020 was prepared under the general responsibility of Xiaozhun Yi WTO Deputy Director-General and Robert Koopman Director of the Economic Research and Statistics Division. The report was coordinated by Marc Auboin and Ankai Xu. The authors of the report are Marc Auboin Marc Bacchetta Cosimo Beverelli Eddy Bekkers Kian Cassehgari Posada Emmanuelle Ganne John Hancock Kathryn Lundquist Gabrielle Marceau José-Antonio Monteiro Roberta Piermartini Stela Rubínová Victor Stolzenburg Ankai Xu and Qing Ye (Economic Research and Statistics Division).
Tariff Negotiations and Renegotiations under the GATT and the WTO
Over the past seven decades since the General Agreement on Tariffs and Trade (GATT) was established in 1947 there has been a phenomenal increase in international trade in goods largely due to sustained efforts by the world’s main trading nations to reduce and eliminate tariff barriers in a multilaterally orchestrated manner. This publication reviews how the procedures and practices relating to tariff negotiations and renegotiations have evolved over this time. In particular this new edition recounts how negotiations to expand the duty-free coverage of the Information Technology Agreement were concluded and provides an account of tariff renegotiations regarding successive enlargements of the European Union. It also covers tariff negotiations for the accession of a number of new members to the WTO such as China and Russia. This book will be of particular interest to negotiators members of government trade ministries economists and academics specialized in trade policy.
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.
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.
Introduction
The world is continually changing driven by technological innovations that affect the way we live and do business. The history of the world economy is intimately linked to technological progress. The invention of the steam engine mechanized production the discovery of electricity enabled mass production and the rise of the internet made it possible to coordinate various production stages at a distance leading to a fragmentation of production that gave rise to global value chains.
Acknowledgements
My sincere thanks go to my colleague Ms Kenza Le Mentec for her precious guidance. Kenza introduced me to the subject and provided invaluable inputs in particular for the technical sections describing the technology and the section on trade facilitation. This publication would not have been possible without her support.