Global trade has reached new heights this year, with trade volumes and values hitting record highs. However, the future of global trade is uncertain as the threat of trade wars looms large. This was the key message of the United Nations’ report on trade and development, released on Thursday.
The report, titled “Trade and Development Report 2025: Harnessing Globalization for Inclusive and Sustainable Development”, emphasized the positive impact of trade on economic growth and development. It highlighted that global trade has been a major driver of poverty reduction, job creation, and technological advancement.
According to the report, the total value of global merchandise trade in 2020 is estimated to have reached $20.5 trillion, a 6% increase from the previous year. This is a remarkable achievement, considering the challenges posed by the COVID-19 pandemic and the resulting economic downturn. The report also stated that the volume of global trade in goods and services is expected to grow by 8% in 2021, reaching a value of $22.3 trillion.
These positive developments are attributed to the swift recovery of major economies, such as China and the United States, and the deployment of effective policy measures by governments to mitigate the impact of the pandemic. However, the report cautioned that the future of global trade is uncertain due to the potential threat of trade wars.
Trade wars, which are conflicts between nations over trade policies, have the potential to disrupt global supply chains, increase tariffs, and cause inflation, leading to a decline in trade volumes and values. The ongoing trade tensions between major economies, such as the US and China, have already shown adverse effects on global trade, and the situation is expected to worsen if these conflicts escalate.
The report highlighted that the threat of trade wars is a major concern for developing countries, which are already facing economic challenges due to the pandemic. These countries rely heavily on international trade for their economic growth, and any disruptions in trade could have severe consequences.
In addition to trade wars, the report also identified other risks to global trade, such as the slow pace of COVID-19 vaccination in developing countries, rising debt levels, and the potential impact of climate change on trade patterns. It stressed the need for coordinated and inclusive policy measures to address these challenges and ensure a sustainable and inclusive recovery.
The report also emphasized the importance of harnessing globalization for inclusive and sustainable development. It stated that globalization has been a key driver of economic growth, but it has also led to growing inequalities and environmental degradation. Therefore, there is a need to reshape globalization and make it work for everyone, especially the most vulnerable and marginalized communities.
The United Nations has called on governments to adopt a coordinated approach to address these challenges and ensure a sustainable and inclusive recovery. It also stressed the importance of international cooperation and dialogue to prevent and resolve trade conflicts. The report urged developed countries to support developing nations in their recovery efforts and to ensure that the benefits of globalization are shared by all.
Despite the challenges and uncertainties, the United Nations remains optimistic about the future of global trade. The report emphasized that with the right policies and actions, global trade can continue to be a powerful tool for economic growth and development. It also highlighted the potential of digital technologies, such as e-commerce and digital services, to further boost trade volumes and values in the coming years.
In conclusion, the United Nations’ report on trade and development has highlighted the remarkable achievements of global trade this year, despite the challenges posed by the pandemic. However, the threat of trade wars and other risks pose a significant threat to the future of global trade. It is imperative for governments to adopt a coordinated and inclusive approach to address these challenges and ensure a sustainable and inclusive recovery. With the right policies and actions, global trade can continue to drive economic growth, create jobs, and promote sustainable development for all.