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WTO Report 1 PDF

This document provides an introduction and overview of the structure of a report on trade in a globalizing world. The report will examine the benefits of trade and how they have been distributed. It will analyze patterns of industry concentration and fragmentation in international trade. The report will also explore the gains from trade theoretically and through evidence. It will consider how trade affects poverty and the most vulnerable groups. Finally, it will discuss challenges of more open trade and complementary policies needed at national and international levels.

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Karlo Brenna
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Download as PDF, TXT or read online on Scribd
49 views

WTO Report 1 PDF

This document provides an introduction and overview of the structure of a report on trade in a globalizing world. The report will examine the benefits of trade and how they have been distributed. It will analyze patterns of industry concentration and fragmentation in international trade. The report will also explore the gains from trade theoretically and through evidence. It will consider how trade affects poverty and the most vulnerable groups. Finally, it will discuss challenges of more open trade and complementary policies needed at national and international levels.

Uploaded by

Karlo Brenna
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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II  A INTRODUCTION

II TRADE IN A GLOBALIZING WORLD


A I NTRODUCTION
Economic integration is proceeding across the world Industries do not spread their operations evenly
at an unprecedented pace. Globalization has brought across countries, but tend to concentrate in
enormous benefits for many countries and citizens. particular locations. These dynamics can be self-
But some have been on the losing end of the process, reinforcing, leading to agglomeration in some places
and opposition to further integration is mounting and de-industrialization in others. At the same time,
for a multitude of reasons. Trade is just one aspect with reductions in transport and other trade costs,
of globalization, and links with broader economic, production processes can be split up into more and
political and technological forces are manifold and more individual steps. This has allowed firms in
complex. Certain arguments against open trade are remote locations to become leaders in specialized
fuelled by a variety of factors – including a general activities and to join international production
fear of change – that have little to do with further networks. Others remain outside these networks,
trade opening. Governments responding to anti- often due to institutional, administrative and other
trade pressures stemming from anti-globalization constraints.
arguments risk making poor policy choices. Trade
scepticism is clearly a cause of concern, particularly Policy-makers must address these issues if they want
at a time when WTO members are striving to to allay public fears about trade and to allow nations
complete the Doha Round. At this crucial juncture, to benefit from the considerable gains that can
it seems appropriate to revisit the case for trade and result from trade. Action complementary to trade-
to ask ourselves whether the traditional arguments opening is needed at the national level, but some
in favour of free trade are still valid. policies require multilateral coordination. Moreover,
policies designed to reduce trade barriers should
It is time to remind ourselves what trade can not prevent governments from taking appropriate
contribute, which seems to have been forgotten in flanking measures. A final section of this Report
some quarters, but also to be candid about who has will contemplate how well the WTO is equipped to
benefited and by how much. Among the questions defend the trade-related gains from the globalization
explored in this Report are whether countries have that the WTO itself has partly helped to create,
exploited their comparative advantage, realized while at the same time addressing appropriately the
economies of scale from access to larger markets, anxieties created by trade expansion.
organized their industries in a more efficient manner,
and benefited from the spread of technologies. The Structure of the Report
Report will explain the rationale underlying pro-
trade arguments against the background of both Section B of the Report describes and analyzes the
well-established and newer theories about sources of key elements of today’s global integration process,
trade gains. It will also examine available evidence its principal driving forces and some of the worries
to test various theories about these gains. about the costs and benefits of globalization. While
globalization is more than just trade, it is shown
The Report will argue that the benefits from trade that trade has been a major part of the process and
have not been evenly distributed. Comparative that a complementary relationship exists between
advantage may be meaningless if the costs of trade and other elements of economic integration.
shipping a product are higher than the costs of
producing it. The overall gains for a country will Section C re-examines the gains from trade. It
matter little to those who lose their jobs as a result explains the rationale underlying pro-trade arguments
of specialization driven by trade. These people may and examines their theoretical underpinnings. It
have difficulties in taking up positions in expanding also examines available evidence in regard to the
sectors because they are not adequately trained. The realization of such gains.
poor may be particularly vulnerable, since they do
not have the means to ensure a smooth transition Against the background of an understanding of
from one activity to the next. the benefits that trade has to offer, Section D
focuses specifically on countries’ participation in

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WORLD TRADE REPORT 2008

international trade. It examines the evidence of part of this section deals with the link between
falling trade costs and two apparently contrasting trade and poverty and analyzes how the most
patterns in international trade, the geographical vulnerable groups in society are affected by trade
concentration of production in some parts of the liberalization.
world and the fragmentation of production across
numerous regions. This section attempts to clarify Finally, Section F deals with the challenges arising
how widespread these phenomena are and what the from more open trade and the flanking policies
specific concerns may be, especially for developing required to cope with them. Challenges include the
countries not taking part in this process. supply constraints faced by developing countries
and the need to further reduce trade costs, the
Section E examines the distributional consequences need to manage the social consequences of trade
of liberalization and the resistance to further trade liberalization and the relationship between trade
opening that this may trigger. It analyzes how trade and technological progress. While most measures
is likely to affect the distribution of wealth within need to be taken at the national level, the section
economies in the long-run as well as the short-term will discuss the role that international cooperation,
adjustment process following trade reform. Another and the WTO in particular, can play.

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