Document prepared for the sixty-second session of the Trade and Development Board, to be held on 14 to 25 September 2015 in Geneva

Paragraph 18(d) of the Doha Mandate of the thirteenth session of the United Nations Conference on Trade and Development (UNCTAD XIII) states that UNCTAD should “Continue to monitor and assess the evolution of the international trading system and its trends from a development perspective”. Accordingly, the present report

(a) examines the relationship between international trade and inclusive and sustainable development in the context of the unprecedented trade integration of the last two decades;

(b) reviews issues relating to: the gender dimension of trade policy, value chains and production networks, food security, trade and environmental sustainability, and commodity dependence;

(c) analyses recent trends in international trade in goods and services and trade policy;

(d) examines current issues related to the multilateral trading system and regional trade agreements (RTAs).

On the eve of the expiry of the Millennium Development Goals focused development agenda and a transition to a new development paradigm characterized by inclusive and sustainable development, the report reviews the contribution made by international trade.

Trade integration

The last two decades have been characterized by unprecedented trade integration. International trade in goods and services has grown dramatically from about US$5 trillion in 1994 to about US$24 trillion in 2014, notwithstanding the slump in the years of the great recession. World trade has been doubling every decade for the last four decades, facilitated, inter alia, by the reduction of trade costs, including tariff barriers. Developed countries continue to constitute the main players in international trade. However, developing countries account for an increasing share. By 2013, developing countries accounted for over 45 per cent of world trade. The trade integration process has brought many benefits to the world and has created enormous opportunities for economic development of many countries.

However, the benefits and opportunities of trade integration have not always been inclusive and have not always translated into sustainable economic, social and environmental well-being. The trade growth has been mainly in China and in East and South Asia. Least developed countries (LDCs) in particular (apart from some oil- and petroleum-exporting countries) remain less integrated into and marginalized from the global economy. Exports per capita are very low for African countries (less than US$200) as compared to other developing and developed countries. The export growth has also been uneven, with East Asian countries showing much faster growth of exports than other developing countries.

International trade and inclusive and sustainable development

For the ultimate objective of inclusive and sustainable development, trade integration should not only foster economic growth but should also address socioeconomic and developmental concerns such as poverty reduction, job creation, food security, gender equality and environmental sustainability. The close linkage between trade and sustainable development and poverty alleviation will be a defining feature in the post-2015 development paradigm if trade is to have an impact on the sustainable development goals.

Some of the critical areas in which more inclusive and sustainable approaches to international trade, trade policy and the trading system are required are discussed: Gender dimension of trade policy; Value chains and production networks; Food Security; Energy and environmental sustainability; The green, blue and creative economies; and Commodities.