Countries should help those hurt by free trade: Report
The IMF, WTO and World Bank suggest making it easier for people to switch careers or move where jobs are.
WASHINGTON — The world isn’t doing enough to help workers and communities damaged by free trade, the International Monetary Fund, World Bank and World Trade Organization say.
In a report April 10, the three multinational groups repeated their longstanding view that free trade spreads broad economic benefits. Open markets and increased competition can help poor countries rise from poverty, lower prices in rich countries and force companies and countries to become more efficient and focus on what they do best.
But drawing on recent research, they admit those who lose out in global competition can be hit harder and suffer longer than previously understood. The organizations want countries to make it easier for people to switch careers or move where jobs are, and in some cases to provide insurance for lost wages.
The report comes amid a backlash against globalization in the United States and Europe. President Donald Trump was elected after promising to renegotiate or tear up trade agreements and to consider imposing trade sanctions against countries that use what he calls unfair trade practices. British voters decided last year to leave the European Union, a rebuke to policymakers who had sought ever closer economic ties between the countries of Europe.
After surging in the 1990s and much of the 2000s, global trade has faltered since the Great Recession. Last year, world trade grew just 1.9%, the slowest since the recession year 2009.
Roberto Azevedo, the head of the World Trade Organization, said after a meeting with German Chancellor Angela Merkel in Berlin on April 10 that it was important to note the positive impacts of trade
“But also we must recognize the concerns of people about trade and the impact that it can have in their lives,” he told reporters. “We need to ensure the benefits of trade are shared more widely. We should also recognize at the same time that 80% of the jobs that are lost today in the advanced economies are not due to imports. They are lost because of new technologies, innovation and higher productivity.”