Trade and Development Commission, 11th session - Item 4: Trade and Vulnerability

From the hurricanes that hit and devastate coastal areas to diseases that can decimate populations or economic shocks that reverse economic gains, we are all exposed. But some countries and people are more exposed than others.

We live in a world with diverse vulnerabilities. And the poorer you are, the more vulnerable you become and the more risks you face economically, socially and environmentally.

Yet trade tensions and unilateralism further compound the challenges for the most vulnerable. The impact of current trade tensions on the multilateral trading system further threatens the vulnerability of countries.

The recent waning of political and popular support for trade integration among some nations has affected the outlook for multilateral trade cooperation.

Greater trade integration, including greater mobility of people, is increasingly seen by some parties as causing inequalities, social tensions and disintegration.

The very existence of the trading system, and the case for multilateral cooperation on trade, are being questioned, leading to renegotiation of existing and proposed trading arrangements and trade wars.

Developing countries, particularly small ones, suffer most from vulnerabilities, especially related to the unpredictable outlook of international trade. Major vulnerabilities and external risks impede their sustained and beneficial integration into the global economy.

Trade tensions have slowed down trade and the global economy. And the potential Brexit, as UNCTAD has shown, is much more than a European affair: it compromises market access for many developing countries.

Policy uncertainty has already had negative repercussions, for example on global foreign investment flows, which fell by 23% and 13% in 2017 and 2018 respectively. An escalation of trade tensions will further disrupt global value chains, with dire implications for development.

The current challenges to multilateralism compromise trade as one of the engines of the world economy. But beyond growth, the overall challenges to multilateral cooperation reduce our ability to find solutions on many fronts, such as the climate crisis. This is the challenge facing COP25 scheduled in two weeks.

Therefore, re-defining how we support countries in terms of their trade and climate challenges, amidst this trouble with the multilateral trading system, is critical. This can start with the integration of sustainable development dimensions into trade policy, negotiations and agreements.

International cooperation on trade should widen to include trade, development, finance and environmental policies helping vulnerable countries address their special development needs and diversifying their economies.

UNCTAD will continue to provide unambiguous support for international trade cooperation and its development dimension. We can overcome trade scepticism if we can show concretely how trade supports sustainable development.

I urge all stakeholders to urgently explore how trade can enhance resilience for all, and particularly for those more exposed to risks.