12 trade & finance
The fast changing nature of world trade poses new policy challenges
World Trade Organisation
The future of world trade , and the global trading system , will be shaped by a range of economic , political and social factors , including technological innovation , shifts in production and consumption patterns , and demographic change , according to the 2013 World Trade Report published by the WTO on 18 July 2013 . Director-General Pascal Lamy said : ‘ One element clearly stands out in the Report , and that is the importance of trade for development ’.
“ The transformation of trade has been underway for some time ,” said WTO Director-General Pascal Lamy . “ It is manifested most clearly in wider geographical participation in trade and the rise of international supply chain production . One element clearly stands out in the Report , and that is the importance of trade for development . The forecasts and reflections contained in this report do not foresee a reverse of globalisation . But we should remember that the gains it brings could be nullified or at least mitigated if short-term pressures are allowed to override long-term interests , and if its social consequences in terms of the unevenness of its benefits are neglected . This is why renewed efforts are needed to revive the vibrancy of the global trading system .”
One of the most significant drivers of change is technology . Not only have revolutions in transport and communications transformed our world but new developments , such as 3D printing , and the continuing spread of information technology will continue to do so . Trade and foreign direct investment , together with a greater geographical spread of income growth and opportunity , will integrate a growing number of countries into more extensive international exchange . Higher incomes and larger populations will put new strains on both renewable and non-renewable resources , generating even greater need for careful resource management . More effort must also be devoted to addressing environmental issues , the report says .
Economic and political institutions will continue to have a significant role to play in shaping international co-operation , including in trade , as will the interplay of cultural customs among countries . Non-tariff measures will gain in prominence and regulatory convergence will likely constitute the greatest challenge to the trading system of the future . The future of
trade will also be affected by the extent to which politics and policies successfully address issues of growing social concern , such as the availability of jobs and persistent income inequality , as well as environmental concerns , say the authors of the World Trade Report 2013 .
Main points of the Report :
Trends in international trade
Photo : Daniel Ramirez
Dramatic decreases in transport and communication costs have been the driving forces behind today ’ s global trading system . Geopolitics has also played a decisive role in advancing and reinforcing these structural trends .
In the last 30 years , trade in merchandise and commercial services have increased by about 7 % per year on average , reaching a peak of $ 18 trillion and $ 4 trillion respectively in 2011 . When trade is measured in valueadded terms , services play a larger role .
Between 1980 and 2011 , developing economies raised their share in world exports from 34 % to 47 % and their share in world imports from 29 % to 42 %. Asia is playing an increasing role in world trade .
For a number of decades , world trade has grown on average nearly twice as fast as world production . This reflects the increasing prominence of international supply chains and hence the importance of measuring trade in value-added terms .