The World Trade Organization (WTO) Public Forum of 2014 was held under the theme – “Why Trade Matters to Everyone”. With the importance and relevance of trade being questioned in the US elections, and indeed around the world, this theme is still worth addressing.
The WTO Forum aimed to tell “the human story behind trade”. It demonstrated how trade impacts the daily lives of citizens through a focus on three sub-themes:
- Trade and Jobs: Does trade create or destroy jobs?
- Trade and Consumers: Does trade provide consumers with increased access to goods from around the world but at some cost to their health and safety?
- Trade and Africa: Can trade be more effectively used for development and poverty reduction?
The short answer to all three questions is – “yes”! But it’s complicated. Here are some quick thoughts on why, even as we recognize that more needs to be done to minimize its negative impacts, trade matters to everyone:
Jobs: The jobs of the future are linked to the global economy. In fact, most countries today derive a larger share of their income (Gross Domestic Product or GDP) from activities linked to international trade than purely domestic activities. Technological innovation and automation pose the greater threat to today’s “traditional” jobs.
Consumers: Because of trade, today’s consumers can select from a wide variety of goods from around the world in search of the product that best meets their budget.
Businesses: Companies grow by finding new clients for their products and services in international markets. A competitor can be located anywhere around the world. Even local and national companies must now compete on their home turf whether or not they themselves export their goods or services. The replacement for a key ingredient, previously sourced domestically that has become unavailable, too expensive, or obsolete, may be located halfway around the world. So could the next business opportunity. Today’s businesses have to learn how to compete in this globalized environment.
Business Opportunities in the World
The three T’s – Trade Agreements, Trade Financing, and Technology – help to make trade happen, providing the means by which small businesses can take advantage of international business opportunities.
Countries sign trade agreements to reduce the costs to their companies of doing business in other countries. Lowered import taxes, quotas and other trade barriers lower the costs to businesses of importing and exporting goods, allowing them to offer cheaper products and services to consumers.
Businesses can access trade financing which provides a form of insurance that minimizes the risk of either not being paid or not receiving the goods on which payment has been made.
Sellers, using today’s technology, can make information about their goods and services available to consumers using a cell phone on the other side of the globe. Any company with a website is opening itself up to become the next player in international trade.
Trade matters to everyone because this is the means by which businesses and governments generate revenue and consumers obtain the goods that they seek.
To Learn More
If you think that your business is ready to take the next step or to learn more about how you can use the three T’s — Trade Agreements, Trade Financing, and Technology — to expand your business globally, contact us.