Global trade at a crossroads
In the first quarter of 2018, the US imposed tariffs on a range of its imports, including steel, aluminium, washing machines and solar panels, and announced plans to impose a tariff on $50 billion‑worth of products from China. China, along with Canada, the European Union and the Republic of Korea responded with plans of retaliatory measures, sparking widely shared fears of a global trade war.
While tensions between the largest players in global trade threaten to escalate, nearly the entire continent of Africa agrees to become a free trade area. Is global trade closing down or opening up? Is the global economic recovery in danger?
The May briefing of the World Economic Situation and Prospects predicts that the current macroeconomic effect of the proposed tariffs is likely to be modest, with global trade growth expected to remain a robust 3.8 per cent in 2018.
That is, if the trade tensions and barriers do not spiral further and the spillovers are contained. In the opposite case, we could see extensive disruptions to global value chains and a sharp drop in investment and trade. A shock to investment and trade equivalent to half the losses of the financial crisis could push global economic growth down to 1.8 per cent from a baseline of 3.2 per cent.
While the world trade giants are drifting apart, Africa is coming closer together. On 21 March, forty-four African Union states signed the historic African Continental Free Trade Area (AfCFTA), agreeing to remove tariffs on 90 per cent of goods. The UN Economic Commission for Africa estimates the deal will boost intra-continental trade by more than 50 per cent.
In the past, creating a sizeable cluster of markets, similar to AfCFTA, has helped Asian countries boost trade and accelerate industrial development. As a result, close to 60 per cent of all East and South Asian trade in 2017 happened within the region. At the same time in Africa, intra-African trade stood at only 16 per cent. The hopes are for the new deal to create a large market that will allow African countries to develop more value-added production at home.
These two trends – the deepening of integration and globalization, and the backlash against it – will define the year 2018. The outcome of the struggle between them will determine the global economic growth for years to come and, ultimately, impact the chances of achieving the Sustainable Development Goals.
Read the World Economic Situation and Prospects Monthly Briefing: http://bit.ly/wespbrief
Join the UN Assistant-Secretary-General for Economic Development and Chief Economist Elliot Harris, and Dawn Holland, Chief of the Global Economic Monitoring Branch of UN DESA, as they launch the report World Economic Situation and Prospects as of mid-2018 on 17 May 2018, 11 am. For more information, visit http://bit.ly/wespreport.
Exploring pathways for the participation of all
In the 2030 Agenda for Sustainable Development, Heads of State and Government recognized that fostering inclusive societies based on strong and transparent institutions is a crucial requirement for sustainable development. Building sustainable and inclusive societies is a cross-cutting endeavour, essential to achieving all SDGs, including SDG5 on gender equality, SDG8 on decent work and economic growth, SDG10 on reduced inequalities, SDG11 on sustainable cities and communities, SDG13 on climate action and SDG16 on peaceful and inclusive societies, access to justice and effective, accountable and inclusive institutions at all levels.
The ECOSOC Special Meeting will be convened by the President of the Economic and Social Council on 23 May 2018 under the theme “Towards sustainable, resilient and inclusive societies through participation of all”, to explore further collective action in addressing issues of participation and inclusion within the context of the 2030 Agenda.
Emerging global trends, including rising inequality, migration and climate change, are creating an increasingly complex context for the achievement of the Sustainable Development Goals. The Special Meeting will explore the critical role of stakeholder participation, good governance and strong, inclusive institutions in addressing such trends and maintaining the momentum to implement the multilateral landmark agreements reached in 2015.
Exchanging best practices and lessons learned
The Special Meeting will also provide a forum for the exchange of best practices and lessons learned from national experiences in fostering sustainable, resilient and inclusive societies that can inform policy making by Member States and highlight avenues for UN system support. In preparation of the Special Meeting, a preparatory meeting and a series of breakfast meetings with different stakeholder groups, including NGOs, local government representatives, the private sector and academia, were convened by the Permanent Mission of the Czech Republic and the Permanent Mission of Colombia in the end of 2017 and in early 2018.
For more information: 2018 ECOSOC Special Meeting
Release of the World Urbanization Prospects: The 2018 Revision
On 16 May 2018, the Population Division of the Department of Economic and Social Affairs of the United Nations will launch the 2018 Revision of the World Urbanization Prospects, a recurrent series providing estimates and projections of the size of urban and rural populations for all countries of the world, and of population size for individual cities or urban agglomerations. In today’s increasingly global and interconnected world, 55 per cent of the world’s population live in urban areas. In the coming decades, further increases are expected both in the size of the world’s urban population and in its share of the total. The widespread growth of urban areas described in the new revision highlights the importance of building sustainable cities, whose growth should be planned and well managed.
For this latest study, information on the percentage of persons living in urban areas has been updated using the most recent information from population censuses or other sources of official estimates. Similarly, this revision contains updated estimates for cities and urban agglomerations. The current revision includes the latest estimates of the size of the urban and rural populations of 233 countries or areas from 1950 to 2018, with projections to 2050. In addition, it presents the trend in population size for close to 1,900 urban settlements having 300,000 inhabitants or more in 2018.
Key results are:
(1) By 2050 it is projected that around two thirds of the human population will live in urban areas.
(2) Over 90 per cent of the growth in urban populations between now and 2050 will take place in Asia and Africa.
(3) Urbanization is proceeding most rapidly in low-income countries and in sub-Saharan Africa.
(4) About half of all urban dwellers reside in cities with fewer than half a million inhabitants.
Photo: Yang Aijun/World Bank
For more information: Population Division of the UN Department of Economic and Social Affairs
ECOSOC Special Meeting on International Cooperation in Tax Matters
On 18 May 2018, the United Nations Economic and Social Council (ECOSOC) will hold its one-day annual meeting to consider international cooperation in tax matters, with the participation of the representatives of national tax authorities. The meeting will be held immediately following the 16th session of the Committee of Experts on International Cooperation in Tax Matters (Committee), to facilitate dialogue between the Committee and the Council.
The main topic to be addressed during the meeting is taxation and the digitalization of the economy. A number of countries and international and regional organizations have recently made or proposed important tax changes, which seek to address challenges that the digitalization of the economy present for domestic tax systems. Another relevant issue is how new technologies may be used to improve tax collection and taxpayer services and thereby contribute to enhancing domestic resource mobilization. Both aspects will be discussed during the meeting.
Another topic that will be discussed is the problems that arise from the wide tax exemptions requested by some governments and international organizations when they fund projects through Official Development Assistance (ODA). These include economic distortions, increases in transaction costs, potential for abuses, loss of domestic revenue and increased administrative burden for tax administrations.
The meeting will also feature updates on the work of the Committee and of the inter-agency Platform for Collaboration on Tax, a joint initiative of the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations and the World Bank Group (WBG), which is aimed to strengthen cooperation among these organizations in tax matters and their capacity-building support to developing countries.
For more information: ECOSOC special meeting on international cooperation in tax matters