The Case for Trade and Competitiveness

The report examines the symbiotic relationship between trade openness and national competitiveness. It argues that while openness is a necessary enabler of growth, it is insufficient on its own; countries must implement structural reforms in policies, institutions, and connectivity to effectively leverage global markets. The text highlights the shift toward a 'new globalization paradigm' driven by global value chains (GVCs), which allow developing nations to industrialize by joining international production networks rather than building full domestic supply chains. It proposes a competitiveness taxonomy consisting of policies/regulations, institutions, hard connectivity, and soft connectivity. Finally, it calls for '21st-century regionalism'—deep trade agreements that address 'behind-the-border' regulatory coherence to support the complex needs of GVCs.

• Economic openness is a fundamental requirement for successful national development, providing market expansion and driving productivity through international competition, though it must be paired with domestic productivity-enhancing reforms to be fully effective.
• The rise of global value chains (GVCs) has shifted the globalization paradigm from 'made-here-sold-there' trade to a model where production stages are dispersed internationally, effectively treating GVCs as 'factories crossing borders'.
• GVCs offer a new industrialization pathway for developing nations, allowing them to become competitive by 'densifying' their participation in international networks rather than building entire domestic supply chains first.
• Competitiveness is categorized into a four-part taxonomy: policies and regulation (the 'what'), institutions (the 'how'), hard connectivity (physical infrastructure), and soft connectivity (social and knowledge capital).
• To attract GVCs, developing countries must provide 'supply-chain assurances' regarding border administration and infrastructure, as well as 'doing-business assurances' to protect tangible and intangible assets.
• Modern 'deep' regional trade agreements (RTAs) differ from 20th-century versions by focusing on regulatory coherence and 'behind-the-border' policies—such as intellectual property and investment rules—rather than just tariff preferences.
• Subnational governments, particularly cities, play an increasingly critical role in competitiveness by attracting foreign direct investment and finding productive niches within GVCs, with cities contributing 80% of global GDP.

APA

Baldwin, R., Gonzalez, A., Jackson, S., Murphy, K., Sally, R., & Singh, H. V. (2015). The Case for Trade and Competitiveness. World Economic Forum. http://www3.weforum.org/docs/WEF_GAC_Competitiveness_2105.pdf

Chicago

Baldwin, Richard, Anabel Gonzalez, Selina Jackson, Kevin Murphy, Razeen Sally, and Harsha V. Singh. The Case for Trade and Competitiveness. World Economic Forum, 2015. http://www3.weforum.org/docs/WEF_GAC_Competitiveness_2105.pdf.

Wikipedia

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BibTeX

@techreport{baldwin2015case, author = {Baldwin, Richard and Gonzalez, Anabel and Jackson, Selina and Murphy, Kevin and Sally, Razeen and Singh, Harsha V.}, title = {{The Case for Trade and Competitiveness}}, institution = {World Economic Forum}, year = {2015}, month = sep, url = {http://www3.weforum.org/docs/WEF_GAC_Competitiveness_2105.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }