The island nation in the southwestern Pacific Ocean – whose largest trading partner is China – with exports there totaling $20.76bn in 2023, of which $2.33bn was in services – topped a list of 30 economies measured for the third year running.
The United Kingdom (UK) was second and Australia third in the Index, which measures how well trade contributes to mutually beneficial outcomes and provides a deep analysis of economies’ strengths and weaknesses in this context.
A joint project between IMD’s World Competitiveness Center and the Hinrich Foundation – a philanthropic organization working to advance mutually beneficial and sustainable global trade – the Index captures data on members and applicants of major trade alliances, such as the Asia-Pacific Economic Cooperation (APEC), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP) as well as the important regional economies of Bangladesh, India, Pakistan, and Sri Lanka.
The data is split into three areas: economic, societal, and environmental – New Zealand’s strongest category. Other top performers in environmental stewardship were the UK, the Philippines, Mexico, and Australia.
“These economies all have strong environmental regulations and are committed to international environmental agreements. They effectively manage carbon emissions, maintain low pollution levels, and prioritize renewable energy sources. They have an efficient use of energy and policies aimed at reducing their ecological footprints,” said Christos Cabolis, Chief Economist of the WCC.
“The global trade landscape is increasingly characterized by volatility caused by geopolitical instability, supply chain disruptions, and climate crises. This growing uncertainty calls for more sustainable trade practices that can withstand the pressures of volatility. But for trade to be sustainable, it must also be resilient.”
Striking a balance between economic growth, societal advancement, and environmental stewardship
Building “workforce resilience” is becoming a goal of governments and the private sector worldwide, the report also signaled. This means having a healthy, educated, and unexploited workforce, which allows economies to better withstand shocks and seize emerging opportunities. National and environmental resilience are also key concerns.
Workforce resilience is part of a broader trend to encourage societal resilience, which can be understood as the effect of investments that foster both economic and social stability. New Zealand, Canada, Australia, Taiwan, and Singapore do best here.
Singapore and Hong Kong SAR are ranked fourth and fifth, respectively. Thailand (15th), Vietnam (14th), and Chile (11th) mid-ranking countries exhibit adaptability and strategic foresight. Their progression, resilience, and balanced development in the STI offer valuable lessons for nations striving to enhance their rankings and overall performance.
On 24 October at 11am CEST Christos Cabolis, IMD Professor Simon Evenett, and the Hinrich Foundation’s Deborah Elms will use the Index’s results as the ice breaker for a webinar debate moderated by the Foundation’s Chuin Wei Yap on the sustainability of trade in a waning era of comparative advantage. Sign up here.
