The report presented strong evidence that trade has played a crucial role in narrowing income disparities among economies ..reports Asian Lite News
Emerging global trends such as geopolitical tensions, digital revolution and climate change are reshaping the landscape of trade-led development, the World Trade Organization (WTO) has said in a flagship report.
In the 2024 edition of the “World Trade Report” released on Monday, the WTO estimated that global factors such as geopolitical tensions, regional conflicts and trade sanctions have impacted the stable foundation of world economic growth in the past 30 years, potentially leading to trade fragmentation.
On the other hand, the increased capital and skill intensity of modern manufacturing has reduced the scope for manufacturing-led growth in low-income economies. Meanwhile, climate change poses even greater challenges, particularly for these nations.
However, the report also emphasised new opportunities brought by these global trends. For instance, developing economies can lower trade costs through digitalisation, pivot toward service-led growth, or seize the demand for renewable resources in the global green transformation to achieve development.
The report presented strong evidence that trade has played a crucial role in narrowing income disparities among economies since the WTO was established 30 years ago, Xinhua news agency reported.
“Perhaps the biggest takeaway from the report is its reaffirmation of trade’s transformative role in reducing poverty and creating shared prosperity,” WTO Director General Ngozi Okonjo-Iweala said in her foreword to the report.
“But the second biggest takeaway is that there is much more we can do to make trade and the WTO work better for economies and people left behind during the past 30 years of globalisation,” she added.
The report noted that between 1996 and 2021, a high trade share of GDP was strongly linked to faster growth in low- and middle-income economies, helping them narrow the gap in GDP per capita with high-income economies.
The WTO highlighted the need for supportive domestic policies such as vocational training, unemployment benefits, education for a more skilled and mobile workforce, and competition policy to ensure consumers benefit from lower prices, as well as reliable infrastructure, and well-functioning financial markets.
It urged the reduction of trade costs, the bridging of the digital divide, and updates to the WTO rulebook to account for the increasing significance of trade in services, and digital and green sectors.
The report also calls for better coordination among international organizations, since this could help leverage synergies between trade policies and complementary policies, and boost inclusiveness across and within economies.
ALSO READ: UP Goes Big on Chips