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Trade

World Business Council for

Sustainable Development Geneva, September 2007

Doing Business with the World - The new role of corporate leadership in global development

The global view

Snapshots of recent growth

Overview

33

The global view

Over three consecutive years of broad-based global economic growth

Yet 44 developing countries did not reach growth rates above 3% in GDP per capita.1

The growth rate of output in developing economies (6.9%) was double

that of developed economies (3.0%).1

Source: World Bank. 2007. Global Economic Prospects. http://siteresources.worldbank.org/INTGEP2007/Resources/GEP_07_Overview.pdf

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Snapshots of recent growth

Real merchandise trade growth by region, 20041

(Annual percentage change)

The developing country share in world merchandise exports reached 31% in 2004,

its highest since 1950.4

Sources: 1World Trade Organization. 2005 Press Release. ”Developing countries’ goods trade share surges to 50-year peak.”2World Bank. 2007. Global Economic Prospects. 20073Ibid.

Diverging trends in commodity prices3

Oil prices continue to rise2

Societal needs

What are the key challenges?

Overall trade restrictiveness index

Needs & Challenges

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Societal needs

Source: World Bank/IFC. Doing Business in 2006.

What are the barriers to trade?

Increased capacity and infrastructure to produce goods

Reduction of trade barriers Increased trade facilitation

Better transport networksAccess to shipping ports

What are the needs?

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What are the key challenges?1

At the national level Domestic demand and subsistence needs limit capacity Lack of production capacity and outmoded facilities Infrastructure constraints Ineffective government policies and poor regulatory

frameworks

Tariff-related challengesRestrictive trade tariffsAgricultural trade distortions

Stalled talks of the "Doha Development Round"

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Overall trade restrictiveness index

Source for graphs: The International Bank for Reconstruction and Development and The World Bank. 2006. Global Monitoring Report 2006.

High-income countries’ OTRI, overall and toward low income countries, 2005

Changes in OECD OTRI between 2002 and 2005: as tariffs fall, non-tariff policies

become more important

What are the opportunities?

Key messages

Opportunities

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What are the opportunities?

Increase trade facilitation1

Customs modernizationTrade-related infrastructure Inland transitLogistic services Information systemsPorts efficiency Provide expertise and technology transfer to

producers in developing countries Engage with the Aid-for-Trade program Support Doha Round of Trade talks

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Key messages

For business, investing in improved health systems can:

Increase trading opportunities

Diversify competitive sources of supply

Raise awareness among governments and inter-governmental organizations of the need to improve trade facilitation

For governments, an effective policy framework for improved health can:

Create a fully integrated global trade regime

Stimulate all forms of economic activity related to the export and import of goods and services

Improve competitiveness by reducing transaction time and costs

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