| World Trade Report 2018 highlights the transformative impact of digital technology on trade Vietnam has become one of the world's top 20 international trading economies |
The World Trade Report 2023, released by the WTO on September 12, provides new evidence on the benefits of broader, more inclusive economic integration amid early signs of trade fragmentation threatening to undermine global growth and development. The report offers findings on how re-globalization – or increased international cooperation and broader integration – can support security, inclusiveness and environmental sustainability.
WTO Director-General Ngozi Okonjo - Iweala stressed that the post-1945 international economic order was built on the idea that interdependence between countries through growing trade and economic relations would promote shared peace and prosperity.
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For much of the past 75 years, this idea has guided policymakers and helped lay the foundations for an era of unprecedented growth, higher living standards and reduced poverty. But today that vision is under threat, as is the future of an open and predictable global economy. The WTO is not perfect, but it is the trading system that needs to be strengthened, not abandoned.
Launching the report at the opening of the WTO’s annual Public Forum on September 12, WTO Chief Economist Ralph Ossa said this year’s World Trade Report makes the case for expanding trade integration to more economies, people and issues, a process that has been called “reglobalization.” Trade integration “is a powerful tool for improving living standards, lifting hundreds of millions of people out of poverty,” he said.
Beginning with an analysis of the current state of globalization, the report confirms that geopolitical tensions are beginning to affect trade flows, including in ways that lead to fragmentation in trade relationships.
For example, WTO Secretariat calculations show that merchandise trade flows between two hypothetical geopolitical blocs – based on voting patterns at the UN General Assembly – have grown 4-6% slower than trade within these blocs.
However, the report argues that despite these findings, international trade continues to thrive, suggesting that discussions of deglobalization are not yet supported by data. The report points to the expansion of trade in digital services, trade in environmental goods and global value chains, alongside the resilience of trade to recent global crises.
The report goes on to examine the relationship between economic integration and three major challenges to today’s global economic order: Security and resilience, poverty and inclusion, and environmental sustainability – areas in which there have been well-founded arguments that globalization has failed to deliver as expected or exposed countries to undue risks.
Looking at the evidence, the report argues that “reglobalization,” a new drive to integrate more people, more economies, and more pressing issues into world trade, is a more promising solution to these problems. The report finds that trade openness is strongly linked to lower conflict and has led to sharp declines in poverty over the past four decades. In addition, trade-driven technological improvements have had a strong impact on reducing carbon emissions.
Finally, the report highlights the need for greater trade and cooperation to effectively address the key issues facing policymakers around the world – from security to inclusivity and climate change. A revitalized and reformed WTO can play a central role in addressing these challenges.
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