VENDREDI 19 NOVEMBRE 2021 BIZWEEK ÉDITION 369 LA TOUR WORLD TRADE REPORT 2021 More resilience requires more, not less, global economic cooperation This year’s World Trade Report reviews the role of trade, trade policy and international cooperation in building and supporting economic resilience in the face of natural and man-made disasters, including the COVID-19 pandemic. It finds that today’s highly connected global economy is more exposed to risks and vulnerable to shocks, from supply chain cut-offs to infectious disease outbreaks, but that it is also more resilient to shocks when they do strike. The report finds that trade cooperation is instrumental in improving resilience to shocks, because it promotes greater diversification of products, suppliers and markets. It points to ways in which trade can sustain economic resilience for households, firms and governments, particularly when supported by complementary domestic policies and effective global cooperation When a shock hits, trade can help to mitigate the impact by allowing households and businesses continued access to goods and services. During the COV- ID-19 crisis, despite some pandemic-related export restrictions, trade helped countries meet the skyrocketing demand for medical products. In 2020, even as the value of global trade declined by 7.6 per cent, trade in medical supplies grew by 16 per cent. Trade in personal protective equipment increased by nearly 50 per cent – and by 480 per cent for the textile face masks that have become so familiar to all of us. Trade in agricultural products remained stable in 2020, preventing the health crisis from becoming a food crisis. The health and economic crisis caused by the COVID-19 pandemic has been a massive stress test of the world trading system, delivering unprecedented shocks to global supply chains and trade relations among countries. In 2020, the value of global trade in goods and services in nominal dollar terms fell by 9.6 per cent, while global GDP fell by 3.3 per cent, in the most severe recession since World War II. However, the trading system has proved itself more resilient than many expected at the outset of the crisis. Although initially the pandemic severely disrupted international trade flows, supply chains have rapidly adapted, goods have continued to flow across borders, and many economies have gradually begun to recover. The 2021 World Trade Report looks at why the interconnected global trading system is both vulnerable and resilient to crises, how it can help countries to be more economically resilient to shocks, and what can be done to make the system better prepared and more resilient in the future. These are pressing questions in light of the prospect of increasingly frequent and more intense natural and man-made disasters. For example, climate change is driving increases in extreme weather events, such as droughts, cyclones and floods, which can have devastating effects. Human encroachment on animal habitats can increase the risks of spreading zoonotic diseases, which could potentially lead to another pandemic. Although safer production processes have reduced the frequency of technological and industrial disasters, incidences of cyber-attacks and data fraud are expected to continue to increase. Rising inequality, increasing economic fragility, and growing political uncertainty and geopolitical tensions are augmenting the risk of conflicts and violence. While there is a tendency to look at these risks individually, they can interact with each other and create cascading risks and shocks to the environment, economy and society. All of these risk trends can result in high numbers of deaths, injuries and illnesses, as wellas substantial economic losses. For example, earthquakes caused over 884,000 deaths between 1980 and 2020. There were over 4,800 floods around the world during the same period, which affected over 3.5 billion people. The total economic cost caused by natural disasters between 1980 and 2020 amounted to US$ 3.6 trillion (EM-DAT, 2020). The report conveys three main messages : first, today’s hyper-connected global economy, characterized by deep trade links, has made the world more vulnerable to shocks, but also more resilient to them when they strike ; second, policies which aim to increase economic resilience by unwinding trade integration – for example, by re-shoring production and promoting self-sufficiency – can often have the opposite effect, effectively reducing economic resilience ; and third, strengthening economic resilience will require more global cooperation. Vulnerable but more resilient Trade can increase countries’vulnerabilities and exposure to hazards, as wellas facilitating the transmission of those hazards, through economic, financial, transport and digital linkages. At the same time, trade, as a key driver of productivity and economic growth, helps countries to generate the resources they need to prevent risks and 4 Cont’d on page 5 |