Globalization and trade are not enough to reduce poverty in the world, more must be done for poor countries, says the report of the World Trade Organization (WTO), released on Monday, September 9. However, according to this report, low-income economies attract less foreign investment than rich countries.
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Trade is certainly very important for reducing poverty, says the Director General of theWTONgozi Okonjo-Iweala. The problem is that along this path, many low-income economies have been left behind.
What is needed is what the Director-General calls re-globalization: bringing more poor countries into the global economy by helping them attract more foreign direct and trade-oriented investment. For example, becoming a member of the WTO or signing the Tariff Agreement increases trade with other members of the organization by an average of 140%.
“ For the WTO, the immediate priority is to maintain an open, predictable and non-discriminatory multilateral trading system, a task that is becoming increasingly difficult in today’s complex environment. “, said WTO Chief Economist Ralph Ossa at a press conference.
National support policies
But trade alone is not enough, the report says (to consult herein English), to bridge the gaps in the world. In addition to a global strategy, national support policies are needed. These include, in particular: vocational training, unemployment benefits and education to improve the skills and mobility of workers.
According to the report, lagging low- and middle-income economies tend to be less engaged in international trade, receive less foreign direct investment, be more dependent on primary commodities, export fewer complex products and trade with fewer partners.
For the WTO Director General, protectionism is “not not an effective path to better inclusion “, because it can increase production costs and lead to costly trade retaliation.
Also readWTO Annual Report: First Signs of Trade Fragmentation