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World Trade Report
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The report, written by economists in the WTO Secretariat, points out that such
norms can deliver important benefits in terms of information for consumers,
environmental protection and compatibility among related goods and services. But
the report, which was released today, draws attention to the fact that technical
standards can also be used as protectionist measures and can result in higher
operating costs for developing country producers.
The third in an annual series initiated by Director-General Supachai
Panitchpakdi, the 2005 WTR also includes analytical essays on offshoring
services (a particular aspect of outsourcing), air transport services and the
use of quantitative economic analysis in dispute settlement. The report also
touches on recent and selected medium-term developments in global merchandise
and services trade.
Offshoring services are not new, the report states, and are in fact no different
from other forms of trade driven by comparative advantage. Moreover, the authors
argue, the impact of offshoring services on production, employment and trade is
less severe than suggested by some press reports and public commentary.
The report also discusses the role of the General Agreement on Trade in Services
(GATS) in providing mutually beneficial opportunities for trade among countries
via offshoring activities. It concludes that greater conceptual clarity between
particular modes of supply (mode 1 — cross-border transactions, and mode 2 —
consumption abroad), together with greater precision in the nomenclature used to
describe service activities, could enhance the contribution of the GATS to more
open trade. The report notes that the importance of these issues is not confined
strictly to offshoring services.
In looking at trade in air transport services, the report traces the growing
importance of air transport for international trade. Technological changes,
combined with an evolving policy environment, have changed the face of the
industry. It has become more competitive and more efficient. Different models
have been adopted to meet new competition and growing demand for air transport
services. Air carriers have chosen between a hub-and-spoke model and a
point-to-point approach to service provision.
Competitive pressures have also led to a new generation of bilateral “open
skies” agreements among governments, resulting in liberalization of service
between countries. The GATS has exerted limited influence on competitive
developments in the sector, and only covers a narrow range of relevant services
— repair and maintenance services, the marketing and selling of air transport
services, and computer reservation services. Differing views persist as to
whether a multilateral approach would be more effective than existing
arrangements in delivering mutually beneficial liberalization.
Quantitative economic analysis has been used with increasing frequency in
dispute settlement. Two main areas of dispute settlement where quantitative
analysis has proven relevant have been in considering the effects of particular
policy measures on trade flows and the effect of imports on similar domestic
product or their producers. The first of these questions — how policy
interventions impact on trade flows — has arisen most often in relation to
arbitration decisions following a violation (Article 22.6 of the Dispute
Settlement Understanding). The set of issues relating to “like products” arise
in procedures aimed at determining the existence of a WTO violation or in trade
remedy cases.
The report stresses that quantitative analysis cannot offer definitive answers
to questions of legal compliance, but rather may serve as an aid to
understanding the impact of policy actions. Reliance on quantitative economic
analysis is likely to grow in the future, as cases become increasingly
“fact-intensive.”
The report also reviews recent trends in global trade, highlighting that real
merchandise trade grew by 9 per cent in 2004, the strongest performance since
2001. Trade in services expanded by 16 per cent, measured in nominal terms. This rapid
growth in trade was driven largely by the surprisingly strong global economic
performance last year, say the report’s authors. Higher oil and commodity prices
and a recovery in trade in office and telecom equipment helped developing
countries see their share in world merchandise trade rise to 31 per cent, the highest
since 1950.
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This report may be purchased from the WTO
Bookshop or through the
WTO online bookshop.
Download the report in pdf format:
> Complete report
(377 pages; 2757KB)
>
Foreword, executive summary and related material
(35 pages; 271KB)
I- Recent and selected medium-Term Trade Developments
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A. Recent trends in International trade
(12 pages; 288KB)
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B.
Selected
medium-term developments (15 pages;
242KB)
II- Trade, standards and the WTO
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A. Introduction (2 pages;
39KB)
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B. The economics of
standards and trade (44 pages; 518KB)
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C. Institutions and
policy issues (53 pages; 694KB)
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D. Standards in the
multilateral trading system (30 pages;
285KB)
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E. Conclusion (10 pages;
137KB)
III- Thematic essays
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A. Quantitative
economics in WTO dispute settlement (41 pages;
492KB)
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B. International
trade in air transport:
recent developments and policy issues (53 pages;
437KB)
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C. Offshoring
services: recent developments and prospects (37 pages;
389KB)
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Tariff
profiles (26 pages; 269KB)
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Technical notes (5 pages; 77KB)
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