Trade: A Major Driver of Global Growth and Integration

Abstract

While the victors of the Second World War were able to come to a quick agreement on the modalities for managing the flow of finance and development assistance—the IMF and the World Bank Group became functional soon after the Bretton Woods agreement was signed in 1944—it took half a century to establish the World Trade Organization. Created in 1995 by an agreement reached in Marrakesh, the WTO was pronounced almost dead by the world trade ministers who met in Nairobi in 2015.

Some of the major trading nations have moved to develop regional arrangements for managing international commerce. The Trans-Pacific Partnership Agreement among 12 nations led by the United States was signed in New Zealand in late 2015. The TPP will not only determine the way these countries conduct trade. It will also profoundly affect the production processes for what gets to be traded. Work is also proceeding that will result in a far-reaching trade pact between the European Union and the United States. This fracturing of the global trade system will have major consequences for the regions that are not included in these large arrangements.