Number Theory: Free trade is beneficial, but with a few caveats
The World Trade Organization is perhaps facing its most difficult test today since its inception
The World Trade Organization (WTO) will complete 30 years on January 1, 2025. The multilateral trade body is perhaps facing its most difficult test today since its inception as the consensus on a rules-based multilateral trade regime continues to weaken across countries and protectionism grows even in advanced economies.
The latest World Trade Report – it is the flagship publication of WTO – acknowledges this challenge categorically but also tries to build a case for free trade. “Perhaps the biggest takeaway from the report is its reaffirmation of trade’s transformative role in reducing poverty and creating shared prosperity – contrary to the currently fashionable notion that trade, and institutions such as WTO, have not been good for poverty or for poor countries, and are creating a more unequal world,” WTO Director General Ngozi Okonjo-Iweala said in the report. Its case for free trade notwithstanding, the report does admit that gains from trade have not accrued to all stakeholders. Here are four charts which summarise the key message of the report.