Fostering sustainable and inclusive trade

The global trade system faces significant challenges threatening its stability, including rising geopolitical tensions and protectionist measures. The problems also stem from the inequalities that prevent the fair distribution of global trade opportunities and concerns about the planet’s inability to deal with the consumption pattern of the more prosperous half of the world’s population.

In the wake of recent crises, such as COVID-19 and the war in Ukraine, the case for supporting a multilateral, rules-based trade system has never been stronger. It’s important to reemphasize why trade is good – how global trade connects people and improves lives. The reconstruction after World War II is a stark reminder of trade's pivotal role in fostering stability and catalyzing unparalleled investments while uplifting a significant share of the global population from poverty. Since 1990, trade has lifted more than one billion people out of poverty, according to the World Bank. At the heart of the global trade system lies the World Trade Organization (WTO), a treaty and institutional framework that has achieved so much and deserves protection.

Against this backdrop, leading global trade and facilitation experts gathered in Bonn, Germany, in late 2023 for the GoTrade Summit. They discussed everything from WTO reform to innovative digital solutions to foster global commerce. The report summarizing the discussion and providing recommendations is available for download on this page. It’s a must-read for anyone involved in international trade and trade facilitation.

Below, we summarize the four key messages discussed at the GoTrade Summit and considered essential for fostering sustainable and inclusive trade.

As the 13^th WTO Ministerial Conference approaches, the call for a thriving international rules-based trade system is louder than ever. The experts who gathered for the 2023 GoTrade Summit agreed that global trade faces new realities and that the world is at a turning point. They expressed support for WTO reform and discussed ways to support sustainable and inclusive economic growth through trade. The speakers emphasized the need for the WTO to address the current challenges and adapt to the evolving global trade landscape. This includes tackling issues like trade disputes, market access, and the integration of developing nations into the global economy.

These four key messages emerged from the discussions:

• Restoring trust in the WTO and the global rules-based system is crucial for ensuring the continuity and effectiveness of global trade.
  
• Public-private partnerships are a cornerstone in this reformative process.
• Supporting entrepreneurs, especially in those countries that have not yet fully benefited from the global trade system, is crucial for a more inclusive and balanced trade ecosystem.
• Standards are essential for the global trade system to function smoothly – including digital standards that keep up with an increasingly digitalized world.

Let’s dive a little deeper:

The current skepticism and waning confidence point to a need for a more transparent and inclusive approach. Restoring trust in the global trade system and the WTO is paramount for the system’s longevity and effectiveness. This is not just about policy changes but creating a shared belief in the fairness and effectiveness of the system.

The private sector has a significant role to play in this endeavor, especially those companies at the forefront of global trade operations. Their first-hand insights can shed light on the benefits of trade, help address the challenges, and support a more equitable and efficient trade system.

Specifically, the business community can:

• Stress just how critical international production systems are for meeting contemporary global challenges
• Emphasize the potential risks and negative impact of failing to support the global trade system
• Show how well-designed rules and regulations create certainty, drive investment, and ensure regulatory objectives are addressed efficiently with minimal red tape
• Support efforts to make rules stick and fair, including suitable mechanisms and regular reviews
• Share insights and lend practical support and resources to help build trade capacity and make sure trade facilitation measures are adopted and implemented effectively

Furthermore, trust in the global rules-based system can be bolstered by demonstrating its tangible benefits. This includes showcasing success stories where trade has led to economic growth, innovation, and social development. By highlighting these positive outcomes, stakeholders can build a compelling case for the continued support and improvement of the WTO and the broader trade system. 

The notion that partnerships are the lifeblood of a thriving global trade system was a recurring theme at the GoTrade Summit. Partnerships provide a platform for stakeholders to come together, share insights, and build coalitions. These collaborations are crucial for overcoming challenges and ensuring that trade policies are impactful and inclusive.

The complex nature of today's trade environment, marked by rapid technological advancements and shifting geopolitical landscapes, calls for a collaborative approach. Furthermore, the global trade system has many stakeholders, including governments, private enterprises, and international organizations. A shared vision and a collective effort are required to navigate impasses, address implementation challenges, and overcome adoption barriers.

Public-private partnerships can help lay the groundwork for efficient resource flow and facilitate the movement of goods across borders. For example, National Trade Facilitation Committees are crucial for reducing unnecessary red tape and fostering a more business-friendly environment. Such initiatives, actively supported by an articulate business community, pave the way for more streamlined and effective trade processes. For companies like DHL, sharing insights and lending practical support is not just beneficial for operations but also contributes to the broader goal of strengthening the global trade system.

The Summit also underscored the importance of dialogue and collaboration in both formal and informal settings. These interactions provide opportunities to reflect, report on recent developments, and coordinate effective next steps. The collective wisdom and experiences shared by participants, whether as panelists or guests, emphasized the need for businesses to assist policymakers by offering valuable insights about the performance of rules and procedures, both domestically and internationally. 

Entrepreneurs, particularly in developing countries, are often the unsung heroes of the global trade system. Supporting their needs and tackling their challenges is crucial for a more inclusive and balanced trade ecosystem.

Recognizing and addressing the needs of those who have been “left behind” – particularly those in countries that have not yet fully benefited from the global trade system – was touched upon multiple times and in various contexts throughout the GoTrade Summit. This support is crucial for fostering inclusive growth and ensuring that the benefits of trade are more evenly distributed.

For example, trade-enabled competition generally forces businesses to become better at what they do, often leading to improved business practices and better consumer outcomes. However, increased competition can also undermine entire regions. To mitigate these effects, compensatory measures and reconversion funding, as adopted in many European countries, may be necessary. These efforts aim to support entrepreneurs and regions negatively impacted by increased competition, ensuring a more balanced and sustainable development.

Small and medium-sized enterprises (SMEs) were a focal point of discussion at the Summit. Thomas Ogilvie, a DHL Group Corporate Board member, emphasized the significant role of SMEs as a “force for good”. SMEs represent over half of the employed population and are central drivers of GDP growth, especially in emerging markets. They form the backbone of local economies, creating demand for local products and materials and reducing dependencies on international sourcing. This, in turn, is essential for addressing climate-related challenges. Targeted support for SMEs, including hands-on mentoring, training, and access to crucial trade-enabling services such as banking, finance, internet, and transport, is vital. Additionally, addressing gender-specific barriers is important to ensure that significant segments of society are not excluded from the benefits of trade activities.

The topic of trade facilitation emerged as an essential aspect of effective participation in global trade. By reducing unnecessary red tape and providing cost-effective market access, trade facilitation lowers trade barriers and benefits SMEs and entrepreneurs in developing countries. The WTO Trade Facilitation Agreement is a success story in this regard, but there remains scope for further support and trade capacity building. In light of ongoing digital and technological innovations, there is also room to be more ambitious in coordinated border management and frictionless trade.

In an increasingly digitalized world, standards play a critical role in the smooth operation of the global trade system. Within the context of trade facilitation and digital solutions, standards are essential for sharing information effectively between business partners, government agencies, and regulatory authorities.

At the GoTrade Summit, participants agreed that well-considered standards are essential for maximizing the opportunities that arise from trade facilitation measures and the rapid advancements in digital technology. The work of standards-setting organizations is fundamental for ensuring these standards are relevant, efficient, and globally applicable. The Digital Standards Initiative of the International Chamber of Commerce (ICC) is an important example. By actively supporting these organizations, the trade community can contribute to a more streamlined and effective global trade system.

The definition of clear standards is particularly urgent in the logistics and transport sectors. Companies like DHL Group, which are looking to make substantial investments in trade-enabling green transport technologies, require clarity about how to scale up competitive green transport and logistics solutions effectively. Clear standards provide the necessary guidance for businesses to align their practices with sustainability goals while maintaining competitiveness. Developing these standards is a critical step in fostering an environmentally responsible trade system that meets the challenges of climate change and promotes sustainable practices.

The harmonization and standardization efforts in the context of environmental, social, and governance (ESG) regulations and forthcoming EU Carbon Border Adjustment Mechanisms are also vital. The objective is to ensure these regulatory regimes do not add unnecessary complexity or create new trade barriers. Exploring how harmonization and standardization can help reduce compliance costs and minimize market access barriers is crucial. As we move forward, it is imperative to ensure that ESG policy objectives are effectively integrated into the global trade system rather than being set against it. The business community must apply itself effectively and constructively to these efforts, ensuring that international trade continues to thrive while meeting the demands of sustainability.

As we reflect on the insights and key messages from the GoTrade Summit, it's clear that the path to sustainable and inclusive trade requires a concerted effort from all stakeholders. We can build an international trade system that benefits all by restoring trust, fostering partnerships, supporting entrepreneurs, and defining clear standards. The time to act is now to ensure a future where trade continues to be a force for good, driving prosperity and stability across the globe.

We invite you to review the full Summary Report of the 2023 GoTrade Summit and delve deeper into the discussions and insights from the panelists, as well as an extensive bibliography of further reading.