PRESS RELEASE 
EMBARGO  
NOT FOR PUBLICATION, OR DISTRIBUTION BY NEWS AGENCIES UNTIL 
13.00 GENEVA TIME 18 JULY 2013  
 
PRESS/692 
18 July 2013 
 
(13-3867) 
WORLD TRADE REPORT 
Fast-changing nature of world tr ade poses new policy challenges, 
report says 
 
The future of world trade, and the global trading system, will be shaped by a range of economic, 
political and social factors, including technological innovation, shifts in production and consumption 
patterns, and demographic change, according to the 2013 World Trade Report published by the 
WTO on 18 July 2013.   
"The transformation of trade has been underway fo r some time," said WTO Director-General Pascal 
Lamy. "It is manifested most clearly in wider geographical participation in trade and the rise of international supply chain production. One element clearly stands out in the Report, and that is the 
importance of trade for development. The forecasts and reflections contained in this report do not 
foresee a reverse of globalization. But we should remember that the gains it brings could be nullified or at least mitigated if short-term pressures are allowed to override long-term interests, 
and if its social consequences in terms of the une venness of its benefits are neglected. This is why 
renewed efforts are needed to revive the vibrancy of the global trading system." 
 
One of the most significant drivers of change is technology. Not only have revolutions in transport 
and communications transformed our world but new developments, such as 3D printing, and the continuing spread of information technology will  continue to do so. Trade and foreign direct 
investment, together with a greater geographical spread of income growth and opportunity, will 
integrate a growing number of countries into more extensive international exchange. Higher incomes and larger populations will put new strains on both renewable and non-renewable 
resources, generating even greater need for care ful resource management. More effort must also 
be devoted to addressing environmental issues, the report says.   
Economic and political institutions will continue to have a significant role to play in shaping 
international co-operation, including in trade, as will the interplay of cultural customs among countries. Non-tariff measures will gain in prominence and regulatory convergence will likely 
constitute the greatest challenge to the trading syst em of the future. The future of trade will also 
be affected by the extent to which politics and policies successfully address issues of growing social concern, such as the availability of jo bs and persistent income inequality, as well as 
environmental concerns, say the authors of the World Trade Report 2013.  
 PRESS/692 
Page 2 of 3 
 
 
   
Main points of the Report 
 Trends in international trade 
 Dramatic decreases in transport and communication costs have been the driving forces behind 
today’s global trading system. Geopolitics has also played a decisive role in advancing and 
reinforcing these structural trends.   
 In the last 30 years, trade in merchandise and commercial services have increased by about 7 
per cent per year on average, reaching a peak of $18 trillion and $4 trillion respectively in 2011. When trade is measured in value-added terms, services play a larger role.   
 Between 1980 and 2011, developing economies ra ised their share in world exports from 34 
per cent to 47 per cent and their share in world imports from 29 per cent to 42 per cent. Asia is playing an increasing role in world trade. 
 
 For a number of decades, world trade has grown on average nearly twice as fast as world 
production. This reflects the increasing prominence of international supply chains and hence 
the importance of measuring trade in value-added terms. 
 
 Simulations show that in a dynamic economic  and open trade environment, developing 
countries are likely to outpace developed countries  in terms of both export and GDP growth by 
a factor of two to three in future decades. By contrast, their GDP would grow by less than half 
this rate in a pessimistic economic and protec tionist scenario, and export growth would be 
lower than in developed countries. 
 
Fundamental economic factors affecting international trade 
 Demographic change affects trade through its impact on countries’ comparative advantage and 
on import demand. An ageing population, migration, educational improvements and women’s participation in the labour force will all play a role in years to come, as will the continuing 
emergence of a global middle class.  
  
 Investment in physical infrastructure can facilitate the integration of new players into 
international supply chains. The accumulation of  capital and the build-up of knowledge and 
technology associated with investment, particular ly foreign direct investment, can also enable 
countries to move up the value chain by altering their comparative advantage. 
 
 New players have emerged among the countries driving technological progress. Countries 
representing 20 per cent of the world’s total population accounted for about 70 per cent of 
research and development (R&D) expenditure in 1999, but only about 40 per cent in 2010. 
Technology spill-overs are largely regional and stronger among countries connected by production networks. In addition to the traditionally R&D intensive manufacturing sectors, 
knowledge-intensive business services are emerging as key drivers of knowledge 
accumulation.   
 The shale gas revolution portends dramatic shifts  in the future pattern of energy production 
and trade as North America becomes energy sufficient. Increasing water scarcity in the future 
in large swathes of the developing world may mean that the long-term decline in the share of food and agricultural products in internationa l trade might be arrested or even reversed.  
 
 Ample opportunities exist for policy actions, at the national and multilateral level, to reduce 
transportation costs and offset the effect of hi gher fuel costs in the future – improving the 
quantity and quality of transportation infrastructure, successfully concluding the Doha Round 
negotiations on trade facilitation, introducing more competition on transport routes, and supporting innovation.  
 
 Improvements in institutional quality, notably in relation to contract enforcement, can reduce 
the costs of trade. Institutions are also a source of comparative advantage, and trade and institutions strongly influence each other.  PRESS/692 
 Page 3 of 3 
 
 
  Trade openness and the broader socio-economic context 
 Successful integration into global markets requires the constant need for individuals and 
societies to cope with changes in the competitive environment. These adjustments can put 
labour markets under strain and can shape attitudes towards trade openness. Job losses in the 
short-run can exert pressure on governments to use barriers to trade.   In the end, it is open 
economies with a well-trained workforce and a business-friendly environment as well as an effective social protection system that tend to be better placed to adjust successfully. 
 
 Societies’ transition to a sustainable development path requires careful management of the 
multi-faceted relationship between trade and the environment in order  to maximize the 
environmental benefits that open trade can bring. Competitiveness concerns may result in governments incorporating trade-restrictive non-tariff measures into environmental policies as 
a means of compensating affected firms and sectors. Such green incentive packages may 
undermine their environmental effectiveness and exacerbate their potentially adverse trade effects.  
 
 The expansion of trade needs to be supported by a stable financial and monetary system – 
delivering a sufficient volume of trade finance at an affordable cost, particularly for developing 
countries, and macroeconomic policies that promote exchange rate stability. 
 
Prospects for multilateral trade co-operation 
 Some of the main trends which will affect world trade in the coming decades are the 
emergence of international value chains, the rise  of new forms of regionalism, the growth of 
trade in services, the greater incidence of non-tariff measures, higher and more volatile commodity prices, the rise of emerging econom ies, and evolving perceptions about the link 
between trade, jobs and the environment. 
 
 These trends will raise a number of challenges for the WTO. Trade opening, especially in the 
context of non-tariff measures beyond WTO disciplines, is taking place outside of the WTO. A greater focus on regulatory convergence will therefore be required. Interdependence between 
trade in goods and trade in services is increasing. Frictions in natural resource markets expose 
some regulatory gaps. The emergence of new players affects global trade governance in ways 
that need to be better understood. Coherence between WTO rules and non-trade regulations in other multilateral fora needs to be maintained. 
 
 Addressing these challenges will involve reviewing and possibly expanding the WTO agenda. 
Traditional market access issues will not disappear but new issues, particularly with regard to 
non-tariff measures, are emerging. Internal governance matters as well as the role of the WTO in global governance may need to be addressed. An important issue will be how to 
“multilateralize” the gains made in preferential  trade agreements and to secure regulatory 
convergence.  
 
 
END