Trade and Investment

What's the deal with global trade and investment?

A worker walks in a shipping container area at the Port of Shanghai.

Heavy load ... international trade needs urgent reform Image:  REUTERS/Aly Song

Keith Breene
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Trade and Investment

International trade and investment are vital drivers of economic growth. With the size and shape of the world economy changing dramatically in recent years, traditional patterns of trading and investing have had to rapidly evolve alongside it. The challenge is to ensure that the regulatory framework keeps up.

There have been so many changes in the way we do business. The growth of the digital economy, the rise of the service sector and the spread of international production networks have all been game-changers for international trade.

As well as this, foreign direct investment has become a key element of trade between different countries. Rather than simply trading with international partners, more and more companies are buying controlling stakes in foreign enterprises.

What’s the catch?

Despite fundamental changes in the way business is done across borders, international regulations and agreements have not evolved at the same speed. In addition, negotiations to reach a new global trade agreement have stalled.

While there have been a string of bilateral deals struck between countries and regions, there is a pressing need to reform the global trade framework. We also need to address the growing unease over globalization, which is evident from the number of questions being asked about the power of corporations and the adequacy of the regulations governing employment, environmental issues and taxation.

Where does the World Trade Organization come in?

The Doha Development Agenda is the current round of trade negotiations convened by the World Trade Organization (WTO). Since 2001, when multilateral talks began, they have not reached an international agreement.

At the recent WTO trade talks in Nairobi, the organization’s member economies finally reconciled themselves with the impasse and effectively suspended their efforts to reach an agreement.

Where does that leave us?

This means the international community currently has no shared agenda for how global trade and investment should evolve to meet modern demands. It is more important than ever that countries come together to set priorities and agree on practical reforms.

Almost every aspect of international trade and investment regulation needs attention: from competition, sustainability and digital trade through to the governance of international supply networks.


What is the World Economic Forum doing about it?

The E15 is a new initiative that brings together leading international experts from governments, businesses, NGOs and academia to develop a reform agenda for the next decade. A collaboration between the Forum and the International Centre for Trade and Sustainable Development, it is intended to be the world's largest high-level brainstorming exercise. It aims to develop a set of policy options by connecting the foremost experts and decision-makers from private, public and civil-society sectors. So far, the Initiative has engaged 400 experts and generated more than 200 policy options on different topics.

The Forum is also joining forces with the International Chamber of Commerce and the Center for International Private Enterprise to drive the Global Alliance for Trade Facilitation (GATF). Launched at the WTO trade talks in Nairobi, the alliance works to bring the business community together to improve trade facilitation.

Click here for more information on the Forum's Global Challenge on International Trade and Investment.

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