It is now a well established proposition that by liberalising trade and moving to capitalise on their respective areas of comparative advantage, countries can benefit economically. Their use of resources - land, labour, physical and human capital - can be focused on what they can do best.

Firms and consumers alike can benefit; among other advantages, liberalised trade can help to lower prices and broaden the range of quality goods and services available to consumers and can allow companies to diversify risks and channel resources to where returns are highest. When accompanied by appropriate domestic policies, openness also facilitates competition, investment and productivity increases and allows the realisation of scale economies.

Yet, notwithstanding these positive effects, it is also known that most trade reforms, even if beneficial for the country as a whole, can be associated with redistribution effects when some parts of the society may be affected negatively. Also, certain adverse terms of trade developments may leave some countries worse off.

The complexity of these mechanisms and their interaction is at the heart of any form of trade liberalisation, be it unilateral, regional or multilateral, and is the subject of an ever evolving field of research and policy discussions to which the OECD has been actively contributing. While many international, national and private organisations are involved in this type of research, the OECD through its multi-disciplinary approach, enjoys a distinctive advantage to address the complex economic effects of trade reform.