What are the factors that contribute to the shaping of the world trade pattern? Essay
What are the factors that contribute to the shaping of the world trade pattern?
The world is changing with extraordinary rapidity. The majority of economists believe in the world trade development, which proposes that all nations will raise their living standards and real income. According to the 2013 World Trade Report published by the WTO, the future of world trade will be shaped by technological innovation, shifts in production and consumption patterns, and demographic change. The firstly, one of the most significant drivers of change is technology such as revolutions in transport and communications transformed. The developments and the continuing spread of information technology will help to do trade easier. Moreover, trade and foreign direct investment will integrate a growing number of countries into more extensive international exchange.
However, more effort must also be devoted to addressing environmental issues. The secondly, economic and political institutions will continue to have a significant role to play in shaping international trade. Non-tariff measures will gain in prominence and regulatory convergence will likely constitute the greatest challenge to the trading system of the future.
The future of trade will also be affected by the extent to which politics and policies successfully address issues of growing social concern. Demographic change affects trade through its impact on countries’ comparative advantage and on import demand. An ageing population, migration, educational improvements and women’s participation in the labor force will all play a role in years to come, as will the continuing emergence of a global middle class. Trade can bring benefits by allowing countries to exploit their comparative advantage, reap the benefits of scale economies and ensure competition, greater variety and, potentially, more stable markets and prices. The gains from trade are not likely to be evenly distributed, so all countries have to consider about the above of effect factors.