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Ranking the Trade Policies of the G20

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

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The following content is sponsored by The Hinrich Foundation
The Great Wave Off the G20

Ranking the Trade Policies of the G20

In October 2021, the leaders of the G20 nations met for their annual summit in Rome. On the agenda were important items such as climate change, corporate taxation, and of course, the issue of global trade.

Altogether, the G20 represents 85% of global GDP and 66% of the world’s population. It is therefore important to track their trade policy regimes, as they have a significant impact on growth and development.

With this in mind, The Hinrich Foundation has analyzed the policy interventions of every G20 member following the Rome summit to see how global protectionism has advanced.

Liberalizing vs. Harmful Interventions

The first chart in this infographic measures the percentage of each nation’s total value of goods trade that has been affected by harmful or liberalizing interventions.

We define liberalizing interventions as those that liberalize on a non-discriminatory or most favored nation basis. On the other hand, harmful interventions are those that discriminate against the commercial interests of a foreign country.

From this data we can see that Brazil is the only G20 member to have liberalized more trade than it discriminated against.

Note that our data only includes 17 economies. This is because the G20 includes France, Germany, and Italy, while our dataset aggregates them under EU.

(Read more...)

Global Carbon Markets: Highlights from the Latest Report

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

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The following content is sponsored by The Hinrich Foundation
A Visual Primer on Carbon Markets

Global Carbon Markets: Highlights from the Latest Report

The Hinrich Foundation is proud to release their latest data-driven report: A Visual Primer on Global Carbon Markets.

This report was produced in partnership with Visual Capitalist, and provides insights into how carbon markets work, how they’re evolving, and where they’re being effectively implemented. 

Why Carbon Markets?

Climate change is viewed as one of the greatest challenges facing the world today. In response, nearly every country in the world has set a goal to reach net zero by 2050. 

To do this, countries will need to find ways to reduce their reliance on fossil fuels. One solution is carbon markets, which give businesses and individuals a place to buy and sell carbon credits. Carbon credits are tradeable permits that give their holder the right to emit a set amount of CO2. 

When combined with government-imposed limits on pollution, carbon credits create an economic incentive for businesses to reduce their emissions.

For example, a company that pollutes beyond local limits has two options. It can either mitigate its emissions by investing in cleaner technologies, or purchase carbon credits to stay within compliance. In the mean time, the proceeds from these credits may fund other emissions-reducing projects, such as a wind or solar farm. 

Data Preview

This (Read more...)

Ranked: Air Pollution by Economy

by Jenna Ross
This post is by Jenna Ross from Visual Capitalist

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The following content is sponsored by The Hinrich Foundation
Air pollution by economy

Ranked: Air Pollution by Economy

Global air pollution declined by 31% during the initial COVID-19 lockdowns, demonstrating a link between economic activity and air quality.

This graphic from The Hinrich Foundation, the fourth in a five-part series on the sustainability of trade, explores how air pollution varies by economy. It pulls data from the 2022 Sustainable Trade Index, which The Hinrich Foundation produced in collaboration with the IMD World Competitiveness Center.

What is Air Pollution?

In this dataset, air pollution is measured using fine particulate matter known as PM2.5. These particles are less than 2.5 microns in diameter, which is about 28 times smaller than the diameter of human hair. They are made up of things like combustion particles, compounds, and metals.

Not only does their presence cause the air to become hazy, they also pose the greatest health risk compared with any other pollutant. When they are inhaled into the lungs, they can cause respiratory diseases and even death. In fact, air pollution is one of the world’s leading risk factors for death, and is linked to 12% of deaths globally. 

A Geographic Breakdown of Pollution

Air pollution levels have a wide spectrum around the world. Countries with lower GDP per capita tend to have higher pollution because they have less stringent air quality regulations, congested (Read more...)

Mapped: Geopolitical Risk by Economy

by Jenna Ross
This post is by Jenna Ross from Visual Capitalist

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Geopolitical Risk by Economy

The Russia-Ukraine war highlighted how geopolitical risk can up-end supply chains and weaponize trade. More precisely, the war led to trade sanctions, a food crisis, and energy shortages.

This graphic from The Hinrich Foundation, the third in a five-part series on the sustainability of trade, explores how geopolitical risk differs by economy. It pulls data from the 2022 Sustainable Trade Index, which The Hinrich Foundation produced in collaboration with the IMD World Competitiveness Center.

Breaking Down Geopolitical Risk

Geopolitical risk has a strong correlation with GDP per capita, meaning that developing economies typically have less stability.

The following table shows how geopolitical risk breaks down for select economies that are covered in the 2022 Sustainable Trade Index. A lower number indicates less stability, while a higher number indicates more stability.

EconomyGeopolitical Stability
Pakistan5.2
Myanmar9.9
Bangladesh16.0
India17.0
Mexico17.9
Philippines18.9
Papua New Guinea20.3
Russia20.8
Thailand24.5
Indonesia28.3
Ecuador34.4
China37.7
Peru38.7
Cambodia41.0
Vietnam44.8
Sri Lanka45.3
U.S.46.2
Chile49.1
Hong Kong50.0
Malaysia50.9
UK61.3
South Korea62.7
Laos69.3
Taiwan72.2
Australia73.1
Japan87.3
Canada90.1
Brunei90.6
Singapore97.2
New Zealand97.6

Source: World Bank, based on the latest available data from 2020. Values (Read more...)

Ranked: Harmful Tariffs by Economy

by Jenna Ross
This post is by Jenna Ross from Visual Capitalist

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Download the Sustainable Trade Index for free.

Ranked: Harmful Tariffs by Economy

Amid supply chain concerns and geopolitical tension, some economies have taken steps toward localization. More specifically, companies are bringing manufacturing back home and a number of governments have increased tariffs.

This graphic from The Hinrich Foundation, the second in a five-part series on the sustainability of trade, explores which economies have the most and least tariffs. It pulls data from the 2022 Sustainable Trade Index, which The Hinrich Foundation produced in collaboration with the IMD World Competitiveness Center. 

What is a Tariff?

A tariff is a tax on imported goods. Tariffs can be beneficial because they are a source of government revenue and help prevent product “dumping”—when exporters price products abroad for less than they are worth in their home country. By adding a tax to imported goods, a tariff can help keep local products competitively priced.

However, taxes on imported goods can also have drawbacks. They are a form of trade protectionism, and can lower economic growth and productivity. In fact, one long-term study found that a 3.6% increase in the tariff rate led to a 0.4% decline in GDP growth five years later.

Number of Harmful Tariffs by Economy

For the purposes of this data, a harmful tariff is any tariff that (Read more...)

Interested in a Career in Global Trade?

by Rida Khan
This post is by Rida Khan from Visual Capitalist

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Interested in a Career in Global Trade?

The growth of global trade is causing a mass geographical redistribution of workforces.

This is creating employment everywhere it goes and grows, according to the OECD. So how can this redistribution and growth be utilized to launch a successful career?

In the above infographic from The Hinrich Foundation, we explore the massive explosion of career opportunities in international trade. To start, let’s dive into the inner workings of global trade.

Introduction to Global Trading

Trading across borders is a complex process, especially when two or more countries are involved. This is called a Global Value Chain (GVC) and it enables more than half of the world’s international trade.

Here is a visualization of the trade routes of cargo ships across oceans. Note that while this data is from 2012, it is purely intended to demonstrate the complex nature of global trade.

GVCs require a chain of people working throughout the trade route of all internationally exchanged goods and services.

According to the OECD, a country’s ability to benefit from GVCs depends on how much it invests in the skills and education of their citizens.

Understanding the Landscape of Global Trade

For those considering pursuing a career in trade, it can help to look at the landscape of (Read more...)

Introducing the 2022 Sustainable Trade Index

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

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Sustainable Trade Index 2022

Introducing the 2022 Sustainable Trade Index

History has proven that trade can be a powerful engine for economic growth.

It’s for this reason that participation in the international trading system has become a priority for national governments. In many cases, however, economic growth has superseded any concerns about the environment or society. 

It is therefore important to measure whether an economy is trading in a sustainable manner, and whether it can continue doing so.

This infographic from the Hinrich Foundation introduces their 2022 Sustainable Trade Index (STI), which was developed in conjunction with the IMD World Competitiveness Center. 

Who is This Index For?

The purpose of the STI is to stimulate meaningful discussions about the linkages between trade and sustainability. It serves as a practical tool for:

  • Governments and policymakers targeting economic growth through trade.
  • Researchers who are working on trade or sustainability issues and are looking to root their work in quantitative datasets.
  • Communities that want information about ways in which trade impacts them.

A New Index Built Upon a Recognized Tradition

The STI has been produced biannually since 2016 and has historically covered 19 Asian economies with the U.S. as a benchmark. 

For this year, its scope has been expanded to cover 30 major economies worldwide. Altogether, this new group of constituents cover 69% (Read more...)

Global Trade Series: Fragmentation in the Digital Economy

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

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The Hinrich FoundationDownload The Report

Global Trade Series: Fragmentation in the Digital Economy

Since its creation, the internet has vastly expanded sociopolitical and economic development around the world. This is largely attributed to the its ability to facilitate communications, data sharing, and commerce on a truly global scale.

Unfortunately, a free and open internet will not always be guaranteed. Fragmentation between rival nations is growing, and it threatens to split the digital economy into silos.

In Part 3 of The Global Trade Series from the Hinrich Foundation, we examine the current state of digital fragmentation and its implications on the world.

The Physical Divide

Developed economies are entering a fourth industrial revolution, spawned entirely by digital technologies. This includes transformative innovations like artificial intelligence, blockchain, and 5G.

These technologies have the potential to improve income levels and quality of life, but they could also worsen global inequality. This is because of a major gap in internet-supportive infrastructure, as illustrated in the infographic.

To get a sense of this gap, consider the following numbers.

  • 86 countries have fewer than 300 secure servers per million people
  • The U.S. has over 110,000 secure servers per million people
  • Denmark, the Netherlands, and Singapore have an even higher ratio than the U.S.

Secure internet servers are the basis of protected communications on the internet. Without them, (Read more...)

Global Trade Series: Asia’s Digital Economy

by Marcus Lu
This post is by Marcus Lu from Visual Capitalist

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Hinrich Foundation

Global Trade Series: Asia’s Digital Economy

Over the past several decades, Asia has enjoyed robust economic growth. 

Historically speaking, most of this growth was concentrated in China, and was due to a rapid expansion of manufacturing capability. Today, economic growth is being increasingly driven by the digital economy, and it’s spreading to many more countries in the region. 

In this infographic from the Hinrich Foundation, we take a closer look at how trade and digitalization is shaping Asia’s future. 

A Historic E-Commerce Boom

It’s well documented that the COVID-19 pandemic was a catalyst for greater e-commerce adoption. In the U.S. for example, e-commerce’s share of total retail sales grew from 11% in 2019 to 15.3% in 2021. 

This trend is even more pronounced in Southeast Asia, where the number of online shoppers has increased by 70 million since the beginning of the pandemic. For context, that’s roughly equal to the entire population of the UK. 

Furthermore, if we look at the top five countries by e-commerce sales growth in 2022, three are located in Southeast Asia. Widening our scope to Asia in general, this climbs to four out of five.

CountryRegionAnnual sales growth (%)
PhilippinesSoutheast Asia25.9%
IndiaSouth Asia25.5%
IndonesiaSoutheast Asia23.0%
BrazilLatin America22.2%
VietnamSoutheast Asia19.0%
Global average--9.2%

Underpinning this (Read more...)