Features

Making trade work for the 99% (en)

27 octubre 2017
ITC Noticias

Recent years have seen trade facing headwinds. Scratch beneath the surface of many of the recent headlines and political debates, and you will find trade being blamed for a number of challenges facing countries across the world.

What is particularly surprising is how the players in this dialogue have changed. The voices charging trade as being responsible for rising unemployment and loss of domestic industries are now louder in many parts of the developed country world than in developing countries. Trade is not exempt from criticism but we have to be careful not to scapegoat it for ills that cannot be ascribed to it. After all, many of you reading this Trade Forum on your tablets wouldn’t have been able to do so without both trade in services and trade in intermediaries.

Trade has proven its worth. It has helped lift millions out of poverty and will continue to play a crucial role in achieving the main goal of the 2030 Agenda for Sustainable Development: to end extreme poverty. The cursor has to move to a discussion on making trade more sustainable, more inclusive and more people-sensitive.

Trade has had its casualties as coupled with technology change, transportation innovation and changing global demand some people, practices and industries have been left behind. And this will continue. The innovations around self-driving cars, robots and automation, the domination of online retail over brick and mortar shops and a more democratizing approach to services such as hotel and experience tourism will continue to transform the job market.

But harnessed correctly there are opportunities. With a more modern approach to education, deliberate skills upgrading and better connecting these skills and services to market demands; individuals and communities can tap into a new paradigm of trade benefits. The truth remains, however, that at this moment too few people, companies and countries – often referred to as the 1% – are benefitting disproportionally from the growth generated by trade. While the remaining 99% still are not benefiting to the extent they could, or should.

The reaction in some quarters has been to look backwards and inwards, retreating into protectionism. True, protectionism might save a factory here and there in the short term, but at the cost of reducing purchasing power and weakening productivity growth by decreasing competition and scale. Rather than protect, trade protectionism can make entire societies poorer than they otherwise would have been.

Part of the answer lies in crafting better trade policies. We need to tell a better story of how trade actually underpins many of the things that are good in society today and that we enjoy on a daily basis from phones to tablet, food or medicines. We must ensure we bring more voices into the trade debates especially the micro, small and medium sized enterprises (MSMEs), which are the untapped engines of potential growth, innovation and jobs. By helping them to build their productive capacity and connect them to regional and international value chains we can rebalance the 99:1 divide.

Equally important is to ensure that women and youth are fully included in trade. Numerous research, included that conducted by ITC through its SheTrades initiative, has underlined the benefits for society if women are fully included in the economy on an equal footing to men. It is a no-brainer that if 50% of your population is excluded from the economy, we are all losing out on economic growth.

Addressing barriers to trade at home through clear and transparent policies is also important. For example, ITC research on non-tariff measures has repeatedly demonstrated that many barriers to trade are found at home, and not only in partner countries. Likewise, the recently published SME Competitiveness Outlook 2017 – The Region: A Door to Global Trade tells us that deep trade agreement can help generate value-chain activity and support inclusiveness by helping close the competitiveness gap between small and large companies.

Responsible trade also has to be environmentally sustainable and socially inclusive, rooted in cooperation based on shared rules. Having a more transparent approach to global and regional sustainability standards is one place to start – just look at ITC’s recently launched Sustainability Map.

But an even greater part of the answer lies in more progressive domestic policies. From ensuring greater access to finance for MSMEs to investing in green energy, from education and active labour market policies to infrastructure investments, these flanking policies have a huge part to pay in rebalancing the costs and the benefits of more open markets.

Trade for the 99% will be at the heart of ITC’s 2017 World Export Development Forum (WEDF) taking place in Budapest on 25-26 October. From investment to regional trade and from e-commerce to green growth, the discussions will focus on how we can help more people benefit from inclusive and sustainable trade, and how we can help reset the debate to ensure that trade can work for the 99%.