When you expand people’s choices to live secure lives with full freedom and rights, you can say human development process is a success. Human development requires impartial, sustainable economic growth. It also requires promoting social issues such as gender equality, and fostering people’s partaking in decisions that affect their lives. By accelerating economic growth, generating employment and raising incomes, globalisation has the potential to advance human development around the world. But globalisation has also increased vulnerability and insecurity in weaker economies. Multilateral institutions can play a major role in maximising the potential benefits of trade and globalisation while minimising their risks. But the evolution of these institutions has not kept pace with the challenges of this century.

As an example, the cost of compliance with basic Sanitary and Phytosanitary (SPS) (WTO prescribed provision) for poor countries is entirely on the exporter’s plate despite the fact that their capacity for compliance is limited. Many disregard the cost of loss of exports, or rejection of products at the border of an importing country, let alone the cost of reorganisation of supply chain; the existing organisation of supply chain in poor countries slows down export growth.

By intensifying markets, aiding competition and disseminating awareness, international trade can create prospects for growth and help human development. More trade can also result in the increase of collective productivity, and with complementary innovation in newer technologies, encourage growth. It is not a fluke that regions that have grown the fastest also have had the highest export growth. On the other hand, freeing up trade alone does not ensure human development; nor does more trade.

The argument about the relationship between trade liberalisation, economic growth and poverty reduction continues. Prof. Dani Rodrick of Harvard University has shown that trade liberalisation is not a reliable mechanism for self-sustaining growth and poverty reduction let alone human development. The practitioners of private sector development have a strong conviction that trade is directly linked to human development; however, there is no involuntary relationship between the two. Growth can contribute to human development if increased incomes and higher government revenue translate into productive spending. For the moment, no growth makes it particularly hard to achieve human development objectives.

The global governance of trade is generating inequitable outcomes. Though not astonishing in a world of uneven players, this set-up makes it difficult for developing countries, especially the poorest, to formulate policies that promote human development. Thus policymakers in both developing and industrial countries face an urgent challenge: to ensure that the multilateral trade regime allows people to benefit from likely contributions of trade to human development.