trade aid

Hope for the World Economy

  • Why it matters

    Why it matters

    If people put prejudice aside, an increase in global trade could benefit many people in developing countries.

  • Facts

    Facts

    • The WTO Trade Facilitation Agreement has been passed by 108 countries and could some come into effect after further countries ratify it.
    • The new WTO agreement reduces the costs of transactions in the market by focusing on IT-supported automation and transparent regulations.
    • If passed the TFA could help countries from Rwanda to Sri Lanka and Kyrgyzstan and Jamaica manage to trade more easily.
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  • Audio

    Audio

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An employee works inside a garment factory of Orient Craft Ltd in Gurgaon
New rules could considerably ease trade. Source: Reuters

Multilateralism appears to be taking a beating. The same holds true for the liberalization of trade. Even the simple suggestion that the World Trade Organization can provide meaningful progress is met with increasing levels of disbelief.

Since nationalism seems to be on the rise, it is worth remembering that a few decades ago it was primarily developing countries resisting openness in world trade. Instead they insisted on national solutions. But it didn’t take long for many of them to realize that they had worked themselves into a dead end and should reverse direction.

Because the roles have arguably swapped and it is now chiefly some OECD countries seeking to pursue nationalistic paths, we would all do well to remember the most important lesson of the 20th century. Nationalism is never the way to salvation.

At the same time, there can be no doubt that the pace of globalization was (and is) very fast. So the resulting feeling of nervousness is understandable. But we also need to be clear that globalization has made it possible for very many people, particularly in developing countries, to lead a better life and participate in the world economy. As a result, the global “pie” hasn’t shrunk, but rather continues to grow.

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