Geneva, Switzerland – The World Trade Organization's (WTO) annual Public Forum, which commenced on September 12, kicked off with the launch of the annual World Trade Report. The WTO's Chief Economist, Ralph Ossa, addressed a gathering of delegates and highlighted key points from the report, advocating for an increased focus on international trade as a means to address global challenges and stabilize an increasingly unrestful world.
Mr. Ossa emphasized the urgent need for "re-globalization" of the world economy, particularly in the face of growing unilateralism and factionalism. He stressed the importance of positioning international trade as a solution to climate change rather than treating it as one of its causes, stating, "We need to embrace trade, rather than reject it if we want to overcome the most pressing challenges of our time."
In his address, Mr. Ossa frequently referred to the concept of "re-globalization," which he defined as "extending trade integration to more economies, more people, and more issues." Recent global dynamics, including near-shoring as a response to pandemic disruptions and friend-shoring due to geopolitical tensions, were cited as examples of how nations are shifting their trade practices.
The report also highlighted the increasing politicization of trade, with strong trade growth observed between countries with similar voting patterns in the United Nations. This trend underscores the growing intertwining of trade and politics on the global stage.
One of the report's key arguments in favor of trade is its role in poverty reduction. Mr. Ossa presented data that showed a strong correlation between rising international trade and a decrease in the number of people living below the poverty line, defined as less than US$2.15 per day by the World Bank. Between 1981 and 2019, the percentage of people living below this poverty line in lower- and middle-income countries dropped from 55% to 10%.
The report also emphasized the benefits of open economies in terms of resilience in the face of global supply chain disruptions. For instance, nations dependent on grain supplies from both Russia and Ukraine were able to swiftly find alternative sources following the fallout from Russia's invasion of Ukraine.
Furthermore, the report challenged the notion that international trade is a primary contributor to environmental damage. It pointed out that transporting goods to distant export destinations accounts for only one-third of the emissions generated by international trade, with the remaining two-thirds stemming from the production of goods and service delivery. The report argued that trade can play a crucial role in disseminating green technology globally, asserting that, if managed correctly, trade can be a part of the solution to environmental challenges.
However, Deborah James, Director of the Center for Economic and Policy Research, raised concerns about stringent intellectual property rules that hindered vaccine manufacturing in developing countries during the pandemic. She accused the WTO of serving as a promoter of a system designed to benefit multinational corporations and wealthy governments. In response, Mr. Ossa noted that the annual report also proposes improvements to the organization, acknowledging the need for continuous refinement in addressing global challenges through trade.
The annual World Trade Report serves as a call to action, urging nations to recognize the potential of international trade in addressing pressing global issues and fostering stability in an increasingly complex world.