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World Trade Organisation says global trade has continued to grow, and peaked at US$ 30.4 trillion in 2023, a five fold increase since 1995.
In a report to mark its 30th anniversary, the WTO, which was established on April 15, 1994, after the signing of the Marrakesh Agreement, noted that between 1995 and 2023, total world trade in goods and commercial services surged, averaging 5.8 per cent per year.
“The growth of world trade outpaced that of global gross domestic product, which increased by an average of 4.4 per cent per year over the same period. The global trade-to-GDP ratio showed a significant upward trajectory, rising from 20 per cent in 1995 to 31 per cent in 2022, before falling back to 29 per cent in 2023, as goods trade declined in value terms on a balance-of-payments basis,” the report stated.
According to the report, this trade growth has coincided with a significant decrease in poverty worldwide, indicating the impact of trade on supporting economic development and improving people’s lives.
WTO Director-General Ngozi Okonjo-Iweala said: “We are making progress towards global trade recovery, thanks to resilient supply chains and a solid multilateral trading framework — which are vital for improving livelihoods and welfare. It’s imperative that we mitigate risks like geopolitical strife and trade fragmentation to maintain economic growth and stability.”
“According to the WTO’s latest estimates, recently presented in the Global Trade Outlook and Statistics, with the inclusion of mode 3 services trade, the services share of global trade in 2022 was close to 42 percent.
“WTO estimates also show that digitally delivered services have experienced a fourfold increase in value since 2005, with an average annual growth rate of 8.2 per cent over the period 2005-23. This growth has outpaced that of goods (4.8 per cent) and other services exports (4.6 per cent).
“Global exports of digitally delivered services soared to US$ 4.25 trillion in 2023, up 9.0 per cent year-on-year.
Digital delivery includes services traded across borders via computer networks (through the internet, mobile apps, emails, voice and video calls), and, increasingly, through digital intermediation platforms (such as those used for online gaming, music and video streaming, and remote learning),” the report indicated.
“Over the past three decades, the rapid economic growth facilitated by trade in developing and emerging economies has significantly transformed trade patterns, with particular growth in global trade between developing economies.
“Trade between developing economies expanded at a rate of 9.7 per cent per year, surging from less than a tenth of global trade in 1995 to nearly 25 per cent by 2022, reaching a total value of US$ 6.1 trillion,” the report declared.
According to WTO, while trade between developed economies accounted for over half of global trade in 1995, by 2022 this proportion had declined to 39 per cent, confirming a relative shift in trade flows towards developing and emerging economies.
It added that global value chains have shown resilience during this period, increasing at a steady pace between 1995 and 2022.
“In 2022, the total GVC participation rate (comprising both forward and backward participation) reached 48.7 per cent, marking the highest level since 1995.
“There has been a clear downward trend in tariffs since the WTO was established in 1995.
“Between 1996 and 2022, the trade-weighted average of applied tariffs based on the assumption of full utilisation of preferential tariffs dropped from 6.9 per cent to 2.0 per cent,” it enunciated.
