Print Friendly, PDF & Email

2023 World Trade Report: Re-globalization

GS Paper 3

 Syllabus: Economy: Globalization

 

Source: WTO

 Context: The 2023 World Trade Report, published by the WTO, explores the role of international trade in building a more secure, inclusive, and sustainable world.

 

Key findings of the report:

Key ThemesMajor Highlights
Changing NarrativeThe report addresses the shift in the narrative around globalization.
It emphasizes policy goals beyond trade efficiency, including peace, security, poverty reduction, and sustainability.
The report advocates for “re-globalization,” expanding trade integration to more economies, people, and issues.
Geopolitical ShiftsGeopolitical tensions, the Ukraine conflict, and the rise of China have impacted global trade dynamics.
The COVID-19 pandemic highlighted the importance of resilient supply chains.
Reorientation of Trade Trade is gradually aligning along geopolitical lines.
Trade flows within hypothetical geopolitical “blocs” are growing faster than those between them, indicating a shift towards friend-shoring.
Resilience in TradeDespite challenges, bilateral trade between China and the United States reached record highs.
Supply ChainInternational supply chains played a vital role in responding to supply shortages during the COVID-19 pandemic.
InclusivenessTrade integration has lifted millions out of poverty.
SustainabilityTrade can contribute to sustainability by providing access to green technologies.

 

What is re-globalization?

Re-globalization is a concept that advocates expanding and strengthening international trade and economic integration, focusing on making globalization more inclusive, secure, and sustainable.

It emphasizes the need to address contemporary global challenges, such as geopolitical tensions, economic inequality, and climate change, through greater cooperation and trade integration among nations.

 

Re-globalization vs. de-globalisation:

AspectRe-globalizationDe-globalization
FocusExpand and strengthen international trade and economic integration.Reduce international trade and economic interdependence.
GoalsMake globalization more inclusive, secure, and sustainable by addressing global challenges through cooperation.Prioritize domestic industries and reduce reliance on foreign markets.
Key PrinciplesMaintain a strong multilateral trading system, and extend trade integration to more economies, people, and issues.Advocate protectionist measures, trade barriers, and focus on national self-sufficiency.
ExamplePromote trade as a solution to challenges like economic inequality and climate change.Implement tariffs, trade restrictions, and reshoring of production to prioritize domestic interests.

 

The benefits of re-globalization:

  • Economic Growth: Re-globalization, as seen in India during 1994-2005, can stimulate economic growth, leading to a decrease in the poverty rate.
  • Poverty Alleviation: The decrease in the headcount poverty rate by around 1.5 points indicates that re-globalization can contribute to poverty alleviation by expanding economic opportunities and income distribution.
  • Promoting Environmental Sustainability: Re-globalization fosters international coordination on environmental policies.
  • Emission Reduction: The reallocation of resources from less efficient to more efficient firms, as observed in India between 1990 and 2010, can lead to a significant drop in emission intensity.

 

Role of WTO in Fostering Re-globalization:

Role of WTOExamples
Supporting Multilateral Trading RulesEnforcing trade rules and agreements among member countries.
Addressing Global ChallengesFacilitating discussions on trade’s role in peace and security.
Promoting policies to reduce poverty and inequality through trade.
Promoting Economic SecurityHighlighting the importance of resilient supply chains during crises.
Trade FacilitationImplementing agreements like the Trade Facilitation Agreement and the Fisheries Subsidies Agreement
Addressing Trade Cost DisparitiesFocusing on reducing trade costs for middle- and low-income countries.

 

Insta Links:

 

Mains Links:

What are the key areas of reform if the WTO has to survive in the present context of the ‘Trade War’, especially keeping in mind the interest of India? (UPSC 2018)

 

Prelims Links: (UPSC 2015)

The ‘Fortaleza Declaration’ recently in the news, is related to the affairs of:

  1. ASEAN
  2. BRICS
  3. OECD
  4. WTO

 

Ans: 2