Download open trade and well designed employment policies

More open trade and well designed employment policies - key to
supporting growth
Open markets play a pivotal role in supporting growth and job creation, says a
new joint report by the OECD, the International Labor Organization, the World
Bank and the World Trade Organization. But, it adds, trade opening must be
complemented by properly designed domestic policies, including employment
and social protection policies to ensure that benefits from trade are widely
shared.
Seizing the Benefits of Trade for Employment and Growth, presented to Leaders at
the G20 Summit in Seoul on 11-12 November 2010, argues that more open trade
for goods and services can provide a stimulus for the world economy, at a time
when many of the temporary stimulus measures taken by many governments
during the crisis are being unwound.
Trade is contributing to the economic recovery. But with high unemployment
persisting in many countries, governments must resist protectionism, the
organizations say. They underscored that a successful conclusion to the Doha
Development Agenda would send a positive signal that governments continue to
oppose protectionism and seek new opportunities for growth, development and
job creation through trade.
The economic crisis showed how open economies are exposed to external
shocks, the report adds. But openness to trade also helps economies recover
more quickly as they are more adaptable and less dependent on limited domestic
demand.
For open trade to boost growth and jobs on a sustained basis, complementary
policies to address adjustment problems and distributional concerns are needed
to help workers who may lose their jobs as a result of increased international
competition. Relevant measures include stable macroeconomic policies, effective
labor market and social protection policies, investment in education and
enhancing export sectors in developing countries.
An open market frees countries from the constraints of their local economies,
promotes greater efficiency and helps to develop and spread technological
progress, the report says. These are key sources of longer-term gains in
productivity and living standards.
The report by the four organizations was requested by G20 leaders at their
Toronto Summit in June 2010.