Business Today

Governing global trade

The multilateral system that has underpinned world trade for over 50 years is facing serious challenges.

     Print Edition: January 27, 2008

Measured by actual trade flows, the multilateral trading system will appear to have been very successful. Today, WTO members account for more than 90 per cent of world trade in goods (including oil). Trade grew, on average, almost twice as fast as GDP between 1990 and 2005. Global trade is expected to hit $16 trillion in 2007, equal to 31 per cent of world GDP.

A key question now is how to make account of the increasing role of developing countries. These countries' share of global exports rose from 22 per cent in 1980 to 32 per cent in 2005, and is expected to reach 45 per cent by 2030.

Managing these challenges is further complicated by the proliferation in recent years of reciprocal preferential trade agreements (PTAs): more than 200 PTAs are in force, a six-fold increase over the past two decades. By 2010, close to 400 PTAs are due to be implemented.

Governing global trade

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