The World Trade Organization (WTO) chief economist, Ralph Ossa, emphasized that merely increasing trade will not foster inclusiveness on its own. He argued that a thorough strategy is necessary—one that combines open trade with supportive domestic policies and effective international collaboration. Ossa made these remarks during the launch of the 2024 World Trade Report at the 2024 WTO Public Forum in Geneva, attended by representatives from member countries.
Ossa highlighted a key finding from the report, noting that many economies and individuals remain behind in economic development. He explained that income growth has been uneven, with one-third of low and middle-income countries—representing 13 percent of the global population—experiencing slower growth than high-income nations, resulting in a divergence rather than convergence in economic prosperity. These lagging economies are primarily found in regions such as Africa, Latin America, the Caribbean, and the Middle East.
The economist pointed to high trade costs as a significant barrier preventing these countries from participating more fully in international trade. He attributed these costs partly to trade policies that impose high compliance fees for meeting foreign standards and to inadequate implementation of trade facilitation measures. Furthermore, he identified domestic challenges, including poorly developed physical infrastructure and ineffective services, as critical impediments to trade.
Ossa also noted that resource-abundant nations often struggle to diversify their economies beyond their primary export commodities, a situation referred to as ‘Dutch disease,’ where booming commodity exports hinder the growth of competitive manufacturing, agriculture, or services sectors. He stressed that barriers to foreign direct investment (FDI), such as explicit restrictions and an unfavorable investment climate, further complicate the ability of these economies to diversify.
He pointed out that not only do too many economies lag behind, but so do numerous individuals within those economies. Ossa highlighted income inequality as a pressing issue. Despite a slight overall decline in inequality over the past three decades, it remains persistently high in absolute terms, leading to trade discussions often being framed around income inequality. He clarified, however, that trade integration does not have a strong, consistent relationship with income inequality, as it may increase inequality in some countries while decreasing it in others.