WTO Report Highlights Need for Comprehensive Strategy to Promote Inclusiveness

Trade Alone Not Enough to Reduce Inequalities

The World Trade Organization (WTO) said Monday that open trade alone was not enough to reduce inequalities between wealthy and developing nations and more was needed to help poorer countries.

2024 Report on Global Trade

The WTO’s 2024 report on global trade looked at the role that commerce has played to narrow the gap between economies since its creation in 1995.

Transformative Role of Trade

“Perhaps the biggest takeaway from the report is its reaffirmation of trade’s transformative role in reducing poverty and creating shared prosperity,” WTO Director-General Ngozi Okonjo-Iweala said in the foreword.

This conclusion, she added, runs “contrary to the currently fashionable notion that trade, and institutions like the WTO, have not been good for poverty or for poor countries, and are creating a more unequal world”.

More Needs to be Done

“But the second biggest takeaway is that there is much more we can do to make trade and the WTO work better for economies and people left behind during the past 30 years of globalisation,” Okonjo-Iweala said.

Key Findings

The report found that low- and middle-income economies tend to engage less in international trade, receive less foreign direct investment and depend more on commodities.

They also export fewer “complex products” and “trade with fewer partners”, the WTO said.

Protectionism Not the Answer

“Protectionism, the report demonstrates, is not an effective path to inclusiveness,” Okonjo-Iweala said, warning that it can raise production costs and invite “costly retaliation from disgruntled trading partners”.

Comprehensive Strategy Needed

WTO chief economist Ralph Ossa added: “Less trade will not promote inclusiveness, nor will trade alone.”

“True inclusiveness demands a comprehensive strategy — one that integrates open trade with supportive domestic policies and robust international cooperation,” Ossa said.

Domestic Policies Needed

The report said domestic policies that are needed to make trade more inclusive include:

Vocational training
Unemployment benefits
Education for a more skilled and mobile workforce
Competition policy to ensure consumers benefit from lower prices, reliable infrastructure, and well-functioning financial markets

Conclusion

The WTO’s report highlights the need for a comprehensive strategy to promote inclusiveness in global trade. While trade has played a transformative role in reducing poverty and creating shared prosperity, more needs to be done to ensure that all economies and people benefit from globalisation.

FAQs

Q: What is the main takeaway from the WTO’s 2024 report on global trade?

A: The report reaffirms the transformative role of trade in reducing poverty and creating shared prosperity, but also highlights the need for more to be done to make trade work better for economies and people left behind.

Q: What are the key findings of the report?

A: The report found that low- and middle-income economies tend to engage less in international trade, receive less foreign direct investment and depend more on commodities.

Q: Is protectionism an effective path to inclusiveness?

A: No, according to the report, protectionism can raise production costs and invite costly retaliation from disgruntled trading partners.