Actions by govts, businesses to shape trade resilience for years: UNCTAD

Sub: IR

Sec: Int Org

Context:

The United Nations Conference on Trade and Development (UNCTAD) has highlighted the critical importance of global cooperation and balanced policies to avoid economic fragmentation and ensure sustained long-term growth amidst growing trade uncertainties.

Report Highlights:

Global Trade in 2024:

In 2024, world trade experienced record growth, reaching a value of $33 trillion. This growth represented a 7% rise compared to 2023.
The main contributors to this growth were developing economies and a strong increase in services trade.
These factors helped counter some of the challenges posed by ongoing trade disputes and protectionist measures.

Challenge for 2025: Avoiding Economic Fragmentation

Looking ahead to 2025, the primary challenge will be to prevent the world from falling into economic fragmentation, where nations form isolated trade blocs.
This situation could severely disrupt global trade flows, leading to long-term consequences for growth. The key to preventing this outcome will be managing policy shifts carefully, ensuring that these changes do not undermine long-term global economic stability.

Risks from Protectionism and Policy Shifts:

The ongoing rise in protectionism and the shifting policies of major economies represent a key risk to global trade. As governments implement tariffs, subsidies, and industrial policies, trade flows are being significantly reshaped.
The U.S., European Union, and other developed economies are increasingly aligning trade measures with their economic security and climate goals.
In contrast, China has adopted stimulus measures to maintain export momentum. These conflicting trade policies, often involving tariffs or restrictions, are contributing to rising trade uncertainty.

Slowdown in Shipping and Industrial Activity:

Shipping trends offer a precautionary signal, with falling freight indices suggesting weaker industrial activity. This is particularly noticeable in sectors heavily reliant on supply chains, signalling that the global economy could face slower growth in the coming months.

About UNCTAD:

The United Nations Conference on Trade and Development (UNCTAD) is a permanent intergovernmental body established in 1964 as part of the United Nations.
UNCTAD is headquartered in Geneva, Switzerland.
Its main goal is to facilitate the integration of developing countries into the global economy in a way that supports their development.
Reports published by UNCTAD:
- Trade and Development Report
- World Investment Report
- The Least Developed Countries Report
- Information and Economy Report
- Technology and Innovation Report
- Commodities and Development Report