World Trade Report 2021 - Economic resilience and trade
By: World Trade Organization (WTO)
The COVID-19 pandemic and the prospect of increasingly frequent and more intense natural and man-made disasters raise important questions about the resilience of the global economy to such shocks. The 2021 edition of the WTO's World Trade Report examines 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.
Due to its interconnected nature, international trade can increase an economy’s exposure to risks and contribute to the transmission of shockwaves. At the same time, it can bolster economic resilience, particularly when backed by domestic policies and effective global cooperation. As a driver of economic growth, trade can generate the resources and knowledge needed to prepare for crises. It can also help countries recover by facilitating the provision of goods and services needed to cope with a crisis.
Policies aimed at increasing economic resilience by re-shoring production and unwinding trade integration ultimately reduce economic resilience. Conversely, trade diversification can contribute to economic resilience by allowing countries to be less dependent on a limited number of importers, exporters and sectors.
The World Trade Report 2021 shows that a more open, inclusive and predictable trade environment is needed to promote diversification and contribute to economic resilience. The WTO already plays a key role in making economies more resilient by promoting lower trade barriers and greater transparency in trade policies. Further international cooperation at the WTO can strengthen the mutual supportiveness of trade openness and economic resilience so that the world is better prepared to deal with future crises.
The Report is attached below: