The ratio of world trade to the GDP of the globe as a whole, an index also used to measure openness of economies, increased by 20 percent to just over US$20 trillion by the end of 2011. The sharp rise in global trade over the past two decades is partly due to innovations in logistics as well as changes in policies in trading countries, which has led to a reduction in the cost of delivering goods and services across borders.

A report launched by WEF indicates that removing supply chain bottlenecks could significantly enhance global trade. For example, if counties were to improve border management and necessary infrastructure, especially transport systems, to just half the level of Singapore, the global GDP would shoot by 4.7 percent which is about six times what we would get by scrapping all import tariffs. Continue reading →