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By APD writer Carmelo M. Acuña
**MANILA, Jan. 1 (APD) -- **Director-General Roberto Azevêdo said the World Trade Organization (WTO) helped transform international economic relations.
Reflecting on the past 25 years of WTO’s existence, he said with rules for global trade in goods and services have facilitated dramatic growth in cross-border business activity.
“Since 1995, the dollar value of world trade has nearly quadrupled, while the real volume of world trade has expanded 2.7 times. This far outstrips the two-fold increase in world GDP over that period,” Azevêdo said in a statement datelined Geneva, Switzerland and released Wednesday afternoon.
He added average tariffs have almost halved from 10.5% to 6.4% and for economies that joined the WTO after its creation, “accession involved far-reaching reforms and market-opening commitments” which research suggests have been linked to increases in national income.
Mr. Azevêdo added the vibrant market conditions adopted by the WTO was met with improved communications which enabled the rise of global value chains. Businesses have remained confident of moving components and associated services across different locations, they were successful in disaggregating manufacturing production across countries and regions.
“Trade within these value chains today accounts for almost 70% of total merchandise trade,” he added. He explained the rise in global value chains was an important factor in enabling rapid catch-up growth in developing economies “while facilitating increased purchasing power and consumer choice in all countries.” During the past 25 years, poverty reduction has remained significant because in 1995, one in three people living around the world fell below the World Bank’s US$1.90 threshold for extreme poverty.
He claimed today’s extreme poverty rate is less than 10% said to be the lowest in history. He cited WTO members’ agreement to streamline border procedures via a landmark covenant on trade facilitation expected to lift trade by over US$1 trillion per year.
“They have also liberalized trade in information technology products and abolished harmful farm export subsidies,” he said.
Against this backdrop, WTO faces challenges said to be “unmatched” in the past 25 years. Mr. Azevêdo said governments have introduced trade restrictions covering a substantial amount of international trade which affect US$747 billion in global imports in 2019. The uncertainty about market conditions has caused businesses to postpone investment, “weighing on growth and the future potential of economies.”
(ASIA PACIFIC DAILY)
