World Trade Report 2024: Inequality and Convergence Remain Key Challenges
The World Trade Organization (WTO) has published its annual "World Trade Report 2024", which aims to deepen understanding of trade trends, trade policy issues, and the multilateral trading system.
According to the report, since the WTO's creation 29 years ago, the income gap between economies has significantly narrowed. Since 1995, per capita income in low- and middle-income economies has almost tripled, while global per capita income has increased by approximately 65%.
However, this trend has slowed down since the global financial crisis and even reversed during the COVID-19 pandemic, which has disproportionately affected the growth of the poorest economies.
Regarding income convergence and global economic integration, progress has been uneven, leaving some economies behind. Between 1996 and 2021, one-third of low- and middle-income economies, representing 13% of the global population, experienced slower growth than high-income economies in per capita terms, leading to divergence rather than convergence. These divergent economies are mainly located in Africa, Latin America, the Caribbean, and the Middle East.
Another major aspect that requires particular attention is inequality within countries. Despite a slight decrease over the past 30 years, it remains high in absolute terms. For example, the average Gini coefficient is today similar to that of the early 1900s. Moreover, in all economies, the top 1% of earners still receive an average of 15.8% of total income.
The report highlights that reducing trade barriers alone will not ensure inclusivity. Achieving true inclusivity requires integrating open trade with national support policies and effective international cooperation.
For the WTO, the focus should be on maintaining a transparent and equitable multilateral trading system and restoring an effective dispute settlement mechanism.
