The World Trade Organization (WTO) focused on four major trends that have altered the relationship between trade and development in its latest report released on Monday, shedding light on resulting opportunities and challenges for developing economies.
The flagship report titled as World Trade Report 2014 identified these four trends as the economic rise of developing economies, growing integration of global production through supply chains, the higher prices of commodities and the increasing interdependence of the world economy.
Since 2000, GDP per capita of developing economies has grown by 4.7 percent, and the share of these economies in global trade rose from 33 percent to 48 percent, according to the report.
The world trade watchdog noted that trade, a significant boost to economic development, enabled many developing economies to benefit from the opportunities created by emerging new markets, to integrate into the world market through global value chains at lower costs and to reap the rewards from higher world commodity prices,
But alongside with the above progress, challenges are also daunting, as highlighted by WTO.
Upgrading to higher end of the global value chain, which could support further growth, can be challenging for developing economies whose competitive advantage can become more fleeting given that many of them usually perform low-skill tasks where value capture is low.
Besides, taking the agricultural sector as illustration, developing economies increased their market share in global agricultural exports from 27 to 36 percent since 2000, but traditional market access barriers such as tariffs and subsidies continue to affect their exports, and higher prices pose challenges for net importers of these goods.
As for natural resources, several resource-rich countries gained high growth due to the higher prices, but the social and environmental impacts of natural resource extraction as well as economic diversification remain significant concerns for such countries.
And it is true that growing interdependence within global economy allows economies, especially developing economies, to benefit more quickly from growth in other parts of the world, but crises could be transmitted across borders same quickly.
WTO Director-General Roberto Azevedo stressed that the open, non-discriminatory, rule-based multilateral trading system has been important in underpinning the success of developing economies, but the trends also hold challenges and a long road still lies ahead for many of them.
He said that the WTO's work is therefore more important, and decisions taken by WTO members at its ninth ministerial meeting held in Bali, Indonesia in December last year can help poor countries realize their export potential, referring to a trade package sealed in Bali aimed at streamlining trade, allowing developing economies more options for providing food security, boosting least-developed countries' trade and helping development more generally.
Azevedo then called for immediate and effective implementation of the package which marked a historic progress for the 13-year-long Doha Round trade talk, and urged to advance trade negotiations.