Growth Trade Agreements

These considerations underscore the need for further trade liberalization. Although protection has declined significantly over the past three decades, it remains important in both developed and developing countries, particularly in sectors such as agricultural products or labour-intensive industrial and service enterprises (e.g. B construction), where developing countries have comparative advantages. However, progress in integration has been uneven in recent decades. Progress has been very impressive for a number of developing countries in Asia and, to a lesser extent, in Latin America. These countries have succeeded because they have decided to participate in world trade and help them attract the bulk of foreign direct investment to developing countries. This has been the case for China and India since they welcomed trade liberalization and other market-oriented reforms, as well as for higher-income countries in Asia – such as Korea and Singapore – which were themselves poor until the 1970s. Despite the difficult global economic climate, European companies have continued to seize the opportunities offered by the European Union`s trade network, the largest in the world. In 2018, this network covered 31% of European trading exchanges, a figure that will increase significantly (to almost 40%) if more trade agreements enter into force, according to the European Commission`s annual report on the implementation of trade agreements published today.

Total trade accounts for 35% of the EU`s gross domestic product (GDP). The liberation of trade often benefits the poor first and foremost. Developing countries cannot afford the large implicit subsidies, often oriented towards narrow privileged interests that trade protection offers. In addition, the increase in growth resulting from free trade itself tends to increase the incomes of the poor to about the same level as those of the general population.6 For unskilled workers, new jobs are created that enter the middle class. Overall, inequality between countries has declined since 1990, due to faster economic growth in developing countries, partly due to trade liberalization.7 Sustainable economic growth requires measures that make an economy open to trade and investment with the rest of the world. The evidence is clear. No country has experienced economic success in recent decades in the form of a significant increase in the standard of living of its population without being open to the rest of the world. In contrast, trade opening (with openness to foreign direct investment) has been an important element of East Asia`s economic success, where average import tariffs have fallen from 30% to 10% over the past 20 years. For trade to continue to create jobs and benefit the poor, the world must do more to bring low-income countries into the global trading system. In addition, following intensive discussions in the Joint Committees set up under the various trade agreements, several partner countries have removed barriers to trade, allowing more EU companies to take full advantage of the opportunities offered by these agreements. Danish and Dutch farmers, for example, can export beef to South Korea, while Poland and Spain can export poultry meat to South Africa.

The increasing complexity of trade is having a serious impact on the world`s poor, who are often disproportionately disconnected from global, regional and even local markets. Poverty is often concentrated in geographical areas underserved by active economic centres. Businesses and communities in these regions lack opportunities to develop a skilled and competitive workforce; they are not integrated into global production chains and are less able to diversify their products and skills.. . . .