BOOK ONE: 2015 - GLOBALIZATION

Chapter Six: World Trade Organization

II. World Trade

Whether or not the importance of trade for a stable world order is accepted, there is no denying the ever-increasing profile of world trade; according to WTO figures, total global merchandise exports (at current prices) increased by a factor of 301 times between 1948 and 2011:

Year
Merchandise exports, US$ bn
1948
58
1955
95
1960
130
1965
190
1970
317
1975
877
1980
2,034
1985
1,954
1990
3,449
1995
5,164
2000
6,452
2005
10,431
2011
17,816

These are stunning figures, and they are worth a closer look.

World GDP has grown at about 4% a year between 1970 and 2011, according to IMF figures. The growth of merchandise trade as above has been at the rate of more than 15% a year for over 50 years.

World merchandise exports in 1948 represented 22% of US GDP in that year;

World merchandise exports in 2005 represented 85% of US GDP in that year.

Of course, this amazing growth in world trade (and remember that services are on top of those figures and growing even more quickly) is not just thanks to the WTO; but the long-term reduction in tariffs which the WTO has overseen must surely be a major factor in such growth. Interestingly, given the number of enemies of free trade to be found dotted around the world, the WTO has published rigorous statistical studies showing a strong inverse correlation between levels of trade and tariff levels.

Other factors underpinning or associated with the growth in trade no doubt include advances in communications and the long-lasting, stable political environment of the last 50 years.