WTO chief economist Ralph Ossa emphasized that simply reducing trade will not foster inclusiveness. He stated that true inclusivity requires a thorough strategy that combines open trade with supportive domestic policies and strong international collaboration. These remarks were made during the unveiling of the 2024 World Trade Report at the 2024 WTO Public Forum in Geneva, which was attended by representatives from member countries.
Ossa highlighted that many economies and individuals are still being left behind, referencing a key finding of the trade report. He noted, “Income convergence has been uneven, with some economies lagging. A third of low and middle-income economies, representing 13 percent of the global population, grew more slowly than high-income economies, leading to divergence.”
The economist pointed out that these diverging economies are primarily found in Africa, Latin America, the Caribbean, and the Middle East. He identified high trade costs as a significant barrier to trade participation in these regions, attributing this issue partly to trade policies, which include high compliance costs related to foreign standards and incomplete execution of trade facilitation measures.
Moreover, Ossa mentioned that domestic issues such as inadequate physical infrastructure and inefficient services significantly impede trade. He described the challenges faced by resource-rich countries in diversifying beyond their main export commodities, a problem referred to as “Dutch disease,” which occurs when thriving commodity exports undermine the growth of competitive manufacturing, agriculture, or services.
He further pointed out that barriers to foreign direct investment (FDI), including explicit restrictions and unfavorable investment climates, exacerbate these issues. Ossa expressed concern not just about economies being left behind, but also about individuals, emphasizing within-country income inequality, which, despite a slight decline over the past 30 years, remains high in absolute terms.
He concluded that discussions surrounding trade and inclusiveness often revolve around trade and income inequality. However, he noted that the relationship between trade integration and income inequality is complex, as trade can both increase inequality in certain economies while reducing it in others.