Tourism sector is the cluster of production units in different industries that provide consumption goods and services demanded by visitors. According to the IAEG-SDGsInter-Agency and Expert Group on Sustainable Development Goals indicators (United Nations, 2019), the default baseline year for each indicator should be 2015. Trade is recognized as a key factor for the 2030 Agenda, including poverty reduction and economic growth (Tipping and Wolfe, 2016). The Joint Report (CCSA, 2020) warns that the effect of the crisis will spill out and be significantly more devastating for countries heavily dependent on tourism. It has been realized that market access for the developing countries is commercially meaningless if they cannot increase their competitiveness in the sectors in which they have preferential treatment. However, some exceptions may be necessary to allow a longer review of trends. The aim of the programme is to empower countries to participate in international trade in an equitable and sustainable manner. It is worth mentioning that diversifying the strategic economic sectors of LDCs, such as food and health sectors, and empowering both productions and services, such as banking, retailing, and public services with high-level of digitization, represent possibilities for these countries to build more resilient and sustainable economies (World Bank, 2020). MacFeely (2020) has discussed the implications of the changing group composition for assessing progress towards the SDG target. This figure shows the increasingly important role of trade between developing countries (South-South trade), vis-a-vis trade between developed and developing countries (North-South trade). LDCs have a long way to go before doubling their share. This trend might be explained by factors, such as the increasing commercialization of intangibles, the larger role of services in global value chains and the gradual liberalization of this sector. As illustrated in figure 14, other regions of the world received a comparatively small share of international tourist arrivals. The lack of sufficiently large domestic demand to absorb excess supply as external demand drops is likely to lead to mass layoffs of the labor force in the manufacturing sector. Especially after 1999, when trade talks were disrupted by globalization protesters during the WTO ministerial conference in Seattle, the work of the WTO came under increasing scrutiny from its critics. We can start to detect a declining trend already at the beginning of the year. Travel and transport restrictions due to COVID–19 are likely to negatively affect the trade in services in 2020 . Bangladesh almost doubled their share of total services exports as well as total goods exports (from 0.13 to 0.20 per cent for goods and from 0.06 to 0.1 for services). Critics cite exploitation of foreign labour and of the environment and the abandonment of native labour needs as multinational corporations from developed countries transport business to countries with cheaper labour pools and relatively little economic or political clout. The proportion of food items in exports also increased from eight to almost 12 per cent during the same period. However, this is gradually changing. Ring in the new year with a Britannica Membership, Simplified theory of comparative advantage, Factor endowments: the Heckscher-Ohlin theory, State interference in international trade, Protectionism in the less-developed countries, Multilateral agreements after World War II, The General Agreement on Tariffs and Trade, The Organisation for Economic Co-operation and Development, Development of a common agricultural policy, The Latin American Free Trade Association and the Latin American Integration Association, The Andean Group and the Andean Community of Nations, The Association of South East Asia and the Association of Southeast Asian Nations, Trade between developed and developing countries. For the reasons outlined above, the 2010 has been selected as an appropriate baseline year for the scenario discussed in this chapter. In 2018, manufactured goods accounted for about 70 per cent of total merchandise exports from developing economies – almost as much as from developed economies. For developing countries to benefit from the trading system, they should be assisted in removing these obstacles and in building their domestic production, technological and marketing capacities. From the supply side perspective, production is affected for two reasons, because of reductions in labour supply, and because of disruption to value chains. International trade has resulted in creating ‘dual economies’ in underdeveloped countries as a result of which the export sector became an island of development while the rest of the economy remained backward. Trade in services grew by 9.0 in 2017 and 11.6 per cent in 2018. In the late 1970s, North-South agreements accounted for more than half of all agreements – in 2010, they accounted for about one quarter. Developing countries are generally more dependent on trade than are developed countries. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. Reaching this target is likely to be implausible. GDP in the world's second largest economy – China, fell by 6.8 per cent year-on-year between in January-March (WEF, 2020). In many regions of the world, tourism still has unexploited potential as a means of development. In addition to SIDS, many countries in all geographic regions, including South-East Asia (Cambodia, Philippines), North Africa (Tunisia, Morocco), the Caucasus (Georgia), the Americas (Belize, Uruguay, Mexico), Europe (Croatia, Montenegro, Iceland, Greece) and Oceania (New Zealand), benefit greatly from the employment generated across the tourism industries. Member countries also have to inform the WTO about special programmes invol-ving trade concessions for products from developing countries, and about regional arrangements among developing countries. In 2017-2018, exports showed signs of recovery after more sluggish performances in 2015 and 2016. In 2018, developing economies shipped most of their exports to the United States of America (US$1.4 trillion), China (US$1.1 trillion) and other Asian economies. The only developing region that did not benefit from this dynamism in tourism was Sub-Saharan Africa, where the number of tourists fell by nine per cent over the period. Smaller in dollar value than transport and travel, but linked to travel, – exports of personal, cultural and recreational services have been the most dynamic sector in LDCs’ services exports. In addition to the direct service itself, tourism has large multiplier effects that extend to the domestic economy. High dependence on commodity exports makes most LDCs extremely vulnerable to global shocks, such as the current COVID-19 crisis. Some soon-to-graduate countries have only a marginal contribution on the group performance, and whether they are included or not will have little impact, whereas the weight of some other countries is considerable, like that of Bangladesh (see map 1) and will have a significant impact on the performance of the group as a whole. Their trade has increased by almost 15 per cent since 2015, the year the 2030 Agenda began. Bangladesh had a relatively high export concentration indexThis index measures, for each product, the degree of export market concentration by country of origin. The key driver of export growth over this period was the massive rise in the price of fuels, ores and metals, reflecting high demand in developing countries, most notably China. Its share of world exports of service also grew from 0.19 per cent to 0.45 per cent. in 2018 (0.4), the highest index among Asian LDCs (UNCTAD, 2020a). The Indico tool allows UNCTAD to manage complex conferences, workshops and meetings. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). Any countries bilateral or multilateral trade affected by geographical position, natural resources, economic development level and political factors. While tourists travelling to Europe and Northern America increased by only 41 and 32 per cent, respectively, over the same period they increased by 93 per cent in South and South-East Asia and by a remarkable 243 per cent in Central Asia. More than 45 per cent of all international tourists were still travelling to European countries in 2019. It has been observed that with the opening up of the economy and liberalization of trade restrictions, the developing countries, especially India and China, have grown over the years. LDCs’ share amounted to almost 0.8 per cent of total services exports. The volume of India’s foreign trade, given the diversity of its economic base, is low. Most less-developed countries have agriculture-based economies, and many are tropical, causing them to rely heavily upon the proceeds from export of one or two crops, such as coffee, cacao, or sugar. For example, in 2018, Angola exported around 57 per cent of its merchandise to China, Benin around 41 per cent to India, Burkina Faso around 54 per cent to Switzerland, Haiti around 82 per cent to the United States of America and Rwanda around 65 per cent to the United Arab Emirates (WTO, 2020a). Export and import trade we have already covered above. Before services were severely affected by the COVID-19 pandemic, the growth of services exports was a general trend across all economic regions, but mainly benefiting developed economies. Several countries doubled their share of global trade from 2010 to 2019. According to CCSA (2020), countries with the highest number of reported cases of COVID-19 (see In focus: COVID-19) account for about 55 and 68 per cent of global inbound and outbound tourism expenditure, respectively. Yash Tandon evaluates the trade-related technical assistance provided to developing countries to fill the “capacity gap” within the multilateral trading system. Therefore, for SDG 17.11.1, an earlier baseline year is arguably more appropriate. Several LDCs are likely to graduate from this status in the coming years. Markets for such goods are highly competitive (in the sense in which economists use the term competitive)—that is, prices are extremely sensitive to every change in demand or in supply. However, as revealed by the precipitous decline in international travel and tourism in the aftermath of the COVID-19 outbreak, this is a pro-cyclical sector with high elasticity to global and regional economic trends. Angola, Botswana and Guinea-Bissau are the three developing African countries with the highest concentration index, reaching an index value of more than 0.9, which indicates that their trade is concentrated on a very few products. Will the rates of change be calculated using the original composition of LDCs or developing economies at the baseline (say 2010/2011 or 2015), or the group as it will be composed in 2020? At more than US$578 billion, it accounted for 31.5 per cent of the services supplied internationally by developing economies. 3. One of these, depicted on map 2, is through its direct contribution to employment creation. It promotes growth and employment in a multitude of economic sectors, such as transportation, hotels and restaurants, retail trade, financial services and cultural services. The benefits of international trade and investment certainly aren’t void of risks though and setting up overseas may not move as quickly and successfully as anticipated. Grouped together, insurance and financial services, and business and intellectual-property-related services account for US$822.6 billion of developing economies’ exports. Small and vulnerable economies are likely to be hit hard because of their dependence on trade as a driver of economic growth, their small domestic markets and low levels of diversification (see figure 7 above), all of which increase their vulnerability to external shocks – as the global financial crisis demonstrated. From the demand side, demand for manufactured goods could fall considerably. According to this analysis, the economic downturn in China will lead to disruptions in GVCs and diverse spill-over effects across economic sectors and countries. Map 1 shows developing countries’ share of global trade goods exports as well as services exports by country. He argues that this gap in trade policy capacity to negotiate and implement agreements is actually increasing, not decreasing. Indeed, recent figures already show a catastrophic year for the sector. Baldwin (2020) argues that 2020 will experience a more severe trade turndown than the demand shock of the 2008-2009 crisis, as the COVID-19 crisis creates both a demand and supply shock. Be on the lookout for your Britannica newsletter to get trusted stories delivered right to your inbox. We are sorry that this post was not useful for you! The index ranges from 0 to 1 with higher values indicating more market concentration . Nevertheless, LDCs’ exports seem to follow commodity price index trends (see figure 9). In Mexico and Brazil, the automotive industry is most directly linked with Chinese value chains, while in Turkey the sector taking the brunt of the Chinese downturn would be textiles and apparel. While the European Union, United States of America and Japan would be hit hardest, the Republic of Korea (US$3.8 billion) would be worst hit among developing economies.
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