Interviews
WTO Director-General launches 'Trade in a Globalizing World'
15 Jul '08
5 min read
Today's industrialized economies were the early beneficiaries of globalization in the immediate post-war period, and more recently newly industrializing economies have been among the major winners from increasing economic integration. Trade has consistently grown faster than output in the world economy, and manufactures have accounted for an expanding share of total trade.
Traded services have also grown significantly, although their importance is still poorly understood as a consequence of limited data. A major evolving feature of production is the fragmentation of production processes across multiple jurisdictions. International capital flows have played a vital role in the internationalization of production, and more generally in fostering globalization.
Qualified public support for globalization
International surveys of public attitudes towards globalization suggest that a majority of people recognize these benefits. But this recognition is accompanied by anxieties about the challenges that come with globalization. While large majorities believe that international trade benefits their countries, they also fear the disruptions and downsides of participating in the global economy.
Seemingly, stronger support exists for trade in some emerging economies than in industrial countries. Support for globalization appears to be waning in the industrialized countries even though it still enjoys the support of a majority of the public. For policymakers who embrace more open markets, survey results indicating overall support for globalization may be encouraging, but disregard for rising public concern about some aspects of globalization threatens to undermine the legitimacy of governments and imperils social support.
The answer to this tension lies in a balance between open markets and complementary domestic policies, along with international initiatives that manage the risks arising from globalization.
The sources of gains from trade
Turning more specifically to trade, the Report identifies different sources of economic gain from trade. These include the gains from exploiting relative efficiency through specialization and increased competition, increased product variety, realizing economies of scale, and increased productivity within industries.
These insights and theories, dating from the late eighteenth century to the present day, have been subjected to extensive study and testing. Much of the theory has proven robust in terms of its basic insights regarding the gains from trade, although some of the empirical testing has brought out more nuanced conclusions.
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Traded services have also grown significantly, although their importance is still poorly understood as a consequence of limited data. A major evolving feature of production is the fragmentation of production processes across multiple jurisdictions. International capital flows have played a vital role in the internationalization of production, and more generally in fostering globalization.
Qualified public support for globalization
International surveys of public attitudes towards globalization suggest that a majority of people recognize these benefits. But this recognition is accompanied by anxieties about the challenges that come with globalization. While large majorities believe that international trade benefits their countries, they also fear the disruptions and downsides of participating in the global economy.
Seemingly, stronger support exists for trade in some emerging economies than in industrial countries. Support for globalization appears to be waning in the industrialized countries even though it still enjoys the support of a majority of the public. For policymakers who embrace more open markets, survey results indicating overall support for globalization may be encouraging, but disregard for rising public concern about some aspects of globalization threatens to undermine the legitimacy of governments and imperils social support.
The answer to this tension lies in a balance between open markets and complementary domestic policies, along with international initiatives that manage the risks arising from globalization.
The sources of gains from trade
Turning more specifically to trade, the Report identifies different sources of economic gain from trade. These include the gains from exploiting relative efficiency through specialization and increased competition, increased product variety, realizing economies of scale, and increased productivity within industries.
These insights and theories, dating from the late eighteenth century to the present day, have been subjected to extensive study and testing. Much of the theory has proven robust in terms of its basic insights regarding the gains from trade, although some of the empirical testing has brought out more nuanced conclusions.
Click here to view more:
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