Lots of good material in the World Trade Organization’s annual World Trade Report 2008. Released today, the report, “Trade in a Globalizing World,” in its 178 pages deals with the hard questions and issues relating to trade and globalization. As stated in the report’s Executive Summary:
Trade and globalisation more generally have brought enormous benefits to many countries and citizens. Trade has allowed nations to benefit from specialization and economies to produce at a more efficient scale. It has raised productivity, supported the spread of knowledge and new technologies, and enriched the range of choices available to consumers. But deeper integration into the world economy has not always proved popular, nor have the benefits of trade and globalization necessarily reached all sections of society.
Trade scepticism is on the rise in certain quarters, and the purpose of this year’s core topic of the World Trade Report, entitled “Trade in a Globalizing World”, is to remind ourselves of what we know about the gains from international trade and the challenges arising from higher levels of integration.
Not resorting to platitudes, the authors explore trade theory from Ricardo to the “new, new” theories and apply these to results of empirical studies. Here are a few of the topics dealt with in the discussion relating to economic theory and trade: the traditional approach: gains from specialization; “new” trade theory: gains from economies of scale; product variety and increased competition; recent developments: productivity gains; dynamic gains.
From both a theoretical and practical perspective, the report also looks at constraints holding back some of the developing countries from benefiting from globalization and trade.
Some of the report’s recommendations for dealing with countries and workers that are left behind by increased trade and globalization call for some form of safety net, whether it be Aid for Trade or improvements in a country’s unemployment and job retraining programs or perhaps trade adjustment assistance.
In the short-term, however, the need to complete the WTO’s Doha Round of trade liberalization and development is emphasized.