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Prosperity and stability boosted by trade and globalization, says WTO

Prosperity and stability boosted by trade and globalization, says WTO

Trade and globalization have had the double effect of enhancing prosperity for hundreds of millions of people and stepping up stability among nations, according to a new report by the World Trade Organization (WTO).

Countries have gained from specialization and economies of scale to boost efficiency thanks to trade, the WTO’s annual World Trade Report, entitled “Trade in a Globalizing World,” noted.

But the study – focused on examining the gains from international trade – also warned that the reach of these benefits has not extended to all sections of society.

“The challenges facing governments in managing globalization are formidable, and success in spreading prosperity more widely requires a strong common purpose,” WTO Director-General Pascal Lamy wrote in the report’s introduction.

The new publication pointed out that empirical evidence indicates that trade liberalization has not led to a matching reduction in inequality partly because of technological change, pre-existing levels of trade protection and the state of basic infrastructure, among other factors.

It also considered the issue of trade-specific adjustment programmes, particularly in poorer nations lacking general social protection.

WTO emphasized that international cooperation – including through the so-called Doha Round of trade liberalization talks – can contribute to ensuring that gains from trade are equally distributed.