TRADE & FINANCE 27 competition to carry out these lowskilled tasks is often intense . Upgrading to higher value-added tasks can enable developing countries to capture more benefits but can be difficult and costly to achieve . In addition , when competing for the investments that many countries require in order to participate , developing countries can risk being drawn into a race to the bottom on regulatory standards .
Third : the surge in agricultural and natural resource prices over the last decade , and the growing importance of commodity exports . This shift has bestowed significant gains on those developing countries that are in a position to export commodities . Although the risk of a reversal cannot be ruled out , the state of global demand — and especially the strong demand from emerging economies — suggests that prices of agricultural goods and natural resources will remain robust in the foreseeable future .
This means that the agricultural sector , which employs more than half of the labour force in developing countries , can continue to play a critical role in lifting people out of poverty . This role could be strengthened if remaining obstacles to agricultural exports were reduced , including lowering tariff barriers and distortive subsidies globally .
Fourth : the increasingly global nature of macroeconomic shocks . While the crisis of 2008-2009 had its roots in the financial markets of a number of developed countries , the impacts were felt globally . A sharp reduction in trade and investment flows , exacerbated by a fall in aggregate demand and the drying up of trade finance , helped transmit the economic shocks to producers and traders in developing economies . However , the fact that we did not see an outbreak of protectionism on the scale experienced in previous crises meant that a significantly worse fall in international trade was averted .
Some trade restrictions were put in place during the crisis , but neither developing nor developed countries systematically raised trade barriers . The WTO ’ s rulesbased system and its monitoring of members ’ trade policies played a crucial role in keeping protectionist responses under control . Ultimately , the coordinated response combining macroeconomic stimulus with a commitment not to introduce protectionist measures was critical in pointing the way back to growth and in safeguarding the development gains that were made in the period before the crisis hit .
In considering how the system should respond to these trends , it is useful to note how both trade and the WTO have been contributing to economic development during this period . Foremost , the WTO provides a trading environment with clearly defined rules . At the same time , it allows developing countries to take advantage of flexibilities in implementing their commitments . As a result , it has supported wider integration into global value chains , allowed developing countries to take advantage of rising commodity prices , and helped resist the adoption of protectionist measures during the global crisis . The changes we have seen during this period underline the fact that an open , predictable , nondiscriminatory , rules-based multilateral trading system will be a necessary tool to make trade work more effectively for development in the future .
However , while some developing economies have made significant progress in recent years , much still needs to be done to close the gap for many poor economies . In this sense the WTO ’ s work is even more crucial .
In December 2013 , WTO members took a series of decisions in Bali that will help poor countries realize their export potential and sustain the development momentum created in the past decade . This was an important moment , but of course we need to properly implement those results and conclude other negotiating endeavours before us . Indeed , the scale of the changes in the relationship between trade and development since the millennium underlines the importance of further updating the WTO ’ s rules , disciplines and flexibilities . It will be essential that we do so if we are to ensure that all countries are able to participate fully in the global economy in the years to come , and that people all over the world are able to feel the benefits of trade in improving their lives and the prospects of their families and communities .
In this context the role of the G20 in promoting trade and strengthening the multilateral trading system is more important than ever . ■