Geneva, Sep 10 (IANS) The World Trade Organisation (WTO) on Monday released a report which said that geopolitical tensions, the digital revolution and climate change are impacting trade-based growth.
In its 2024 “World Trade Report”, the WTO estimates that global factors such as geopolitical tensions, regional conflicts and trade restrictions have undermined the stable foundations of world economic growth over the past 30 years, increasing the risk of trade fragmentation.
On the other hand, the increasing capital and skill intensity of modern construction has reduced the scope for construction-led growth in low-income economies. Meanwhile, climate change is posing even greater challenges for these countries.
However, the report also highlights new opportunities brought about by these global trends. For example, developing economies can reduce business costs through digitalisation, shift to service-led growth, or take advantage of the demand for renewable resources in the global green transition.
According to news agency Xinhua, the report presented strong evidence that trade has played an important role in reducing income inequalities between economies since the WTO was established 30 years ago.
“Perhaps the greatest achievement of this report is that it reaffirms the transformative role of trade in reducing poverty and creating shared prosperity,” WTO Director-General Ngozi Okonjo-Iweala said in her foreword to the report.
“But the second most important thing is that there is a lot we can do to make trade and the WTO better for the economies and people who have been left behind during the last 30 years of globalisation,” he said.
The report said that between 1996 and 2021, a higher trade share of GDP was linked to rapid 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 dynamic workforce, and competition policy, so that consumers can benefit from low prices, reliable infrastructure, and well-functioning financial markets.
The report also calls for better coordination among international organisations, as this can help increase coherence between trade policies and complementary policies and promote inclusiveness among economies.
-IANS
RK/KR
