A well-established correlation in trade economics is the connection between gross domestic product (GDP) and openness to trade: as countries become wealthier, they tend to trade more as a percentage of their gross domestic product (GDP). The correlation is complex and not fully understood. As the authors of the World Bank’s Trade Competitiveness Diagnostic put it: “This relationship runs in both directions: the richer countries become the more they tend to trade; more importantly, countries that are most open to trade grow richer more quickly.”
Vietnam is one of the world's development success stories. It is undeniable.
Between 1990 and 2010, Vietnam grew at an average annual rate of 7.4 percent—one of the world’s top five growth performance records, anywhere, over the same 20-year period. In the process, the incidence of poverty has declined dramatically, from 58 percent in 1993 to about 10 percent today. Nowadays Vietnam is no longer considered a low-income country: it has attained lower-middle income status.
Yet this successful economic transition has also generated a number of challenges. Chief among them is that of sustaining economic growth going forward.
Editor's Note: This blog draws on the forthcoming article “New Trade Regionalism in Asia: Looking Past the Sino-American Great Game," written by Swarnim Wagle, to be published in the Global Emerging Voices 2013 Working Papers.
Negotiations over one of history’s most ambitious trade deals have taken another step towards defining the future of Trans-Pacific trade.
The latest round of discussions on the Trans-Pacific Partnership (TPP) wrapped up this past weekend in Salt Lake City, Utah. Negotiators are believed to have made headway on a number of thorny issues, clearing the way for ministerial talks to be held in Singapore, Dec. 7-10.
The TPP will draw together 12 countries dotting the perimeter of the Pacific—Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. But it’s the United States’ efforts to spearhead the talks that have attracted the most attention. Concerns over a lack of transparency and the intrusive scope of the agreements’ provisions into national policymaking have led many to question its objective.
- Brunei Darussalam
- New Zealand
- United States
- East Asia and Pacific
- Europe and Central Asia
- Latin America & Caribbean
- The World Region
- Global Economy
- Information and Communication Technologies
- Law and Regulation
- TTIP. Trans-Pacific Partnership
- Agricultural Subsidies
- Free Trade
Many countries use trade policy to protect their own consumers from spikes in international food prices. It turns out that this well-intentioned practice can actually do more harm than good. During food price spikes -- such as those in mid-2008, early 2011 and mid-2012 – governments restricted the export of food staples or lowered barriers to importing them. They hoped to keep their domestic prices of rice, wheat, maize, and oilseed low, reasoning that this would help their poor and stop people from falling into poverty. But there is new evidence that, while the practice kept each country’s domestic prices down relative to the world prices at the time, it contributed to the higher international prices that were the source of concern. In a World Bank Policy Research Working Paper, “Food Price Spikes, Price Insulation, and Poverty,” we explore this phenomenon and find that it did not reduce global poverty in 2008. On the contrary, we estimate it may have increased poverty slightly (by 8 million people).