A73/208 D. Trade imbalances 17. Currently, trade imbalances are an important topic in public de bate and on the policymaking agenda. After peaking during the mid-2000s, global trade imbalances have stabilized at about 2 per cent of global output(see figure vill). Not surprisingly, large economies are the ones contributing most to global imbalances. As of 2017, the current account surplus of Germany was about $300 billion and that of China about 180 billion. On the other hand. the current account deficit of the United States was about $450 billion in 2017. Whether imbalances are sustainable or not depends more on their size in relation to gross domestic product(GDP)than on their absolute value In that regard, the current account positions of many economies have become closer to more sustainable levels. In particular, the current account surplus of China decreased from more than 8 per cent of its GDP in 2008 to about 2 per cent in 2017 Figure vIll Global trade imbalances 3.5 825 2002200320042005200620072008200920102011201220132014201520162017 Global imbalances(left axis Developed (right axis eveloping (right axis Source: UNCTAD secretariat, based on UNCTADstat and financial statistics from the International Monetary Fund Note: Global imbalances are calculated as the sum of the absolute values of current account balances across all countries divided by two E. Challenges to market access 8. In relation to trade policy, tariffs have remained stable at low levels during the past few years. However, the ongoing tension between leading trading nations could alter this trend. In 2017, the average most-favoured-nation tariff applied nternational trade was about 3 per cent, while the effectively applied rate (considering preferential trade agreements) was about 2 per cent(see figure IX) Beyond averages, tariff protection currently remains a critical factor only in certain sectors and in a limited number of markets. Tariffs tend to be higher in sensitive sectors such as agriculture and apparel, textiles and leather products. Tariffs also remain substantial for most South-South trade(the effectively applied rate is almost 5 per cent), especially regarding South Asian and sub-Saharan African imports. These substantial tariff rates are due principally to the reliance of many countries in those regions on border taxes to finance government budgets 10/22A/73/208 10/22 18-12039 D. Trade imbalances 17. Currently, trade imbalances are an important topic in public debate and on the policymaking agenda. After peaking during the mid-2000s, global trade imbalances have stabilized at about 2 per cent of global output (see figure VIII). Not surprisingly, large economies are the ones contributing most to global imbalances. As of 2017, the current account surplus of Germany was about $300 billion and that of China about $180 billion. On the other hand, the current account deficit of the United States was about $450 billion in 2017. Whether imbalances are sustainable or not depends more on their size in relation to gross domestic product (GDP) than on their absolute value. In that regard, the current account positions of many economies have become closer to more sustainable levels. In particular, the current account surplus of China decreased from more than 8 per cent of its GDP in 2008 to about 2 per cent in 2017. Figure VIII Global trade imbalances Source: UNCTAD secretariat, based on UNCTADstat and financial statistics from the International Monetary Fund. Note: Global imbalances are calculated as the sum of the absolute values of current account balances across all countries divided by two. E. Challenges to market access 18. In relation to trade policy, tariffs have remained stable at low levels during the past few years. However, the ongoing tension between leading trading nations could alter this trend. In 2017, the average most-favoured-nation tariff applied in international trade was about 3 per cent, while the effectively applied rate (considering preferential trade agreements) was about 2 per cent (see figure IX). Beyond averages, tariff protection currently remains a critical factor only in certain sectors and in a limited number of markets. Tariffs tend to be higher in sensitive sectors such as agriculture and apparel, textiles and leather products. Tariffs also remain substantial for most South-South trade (the effectively applied rate is almost 5 per cent), especially regarding South Asian and sub-Saharan African imports. These substantial tariff rates are due principally to the reliance of many countries in those regions on border taxes to finance government budgets. -2 -1 0 1 2 3 4 5 6 0 0.5 1 1.5 2 2.5 3 3.5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Percentage of GDP Percentage of global output Global imbalances (left axis) Developed (right axis) Developing (right axis)