Many people are concerned about the effects of open trade on employment where they live. In fact, OECD analysis shows that liberalised trade is an engine for job creation in all countries, especially as the world moves from economic crisis to recovery.
However, trade liberalisation must be accompanied by appropriate employment and social policies, so that we all reap the benefits of open markets.
NEW Trade and Jobs (pdf, 8 pages, 285 KB)
Some myths, facts and preliminary findings from the International Collaborative Initiative on Trade and Jobs (ICITE), launched and co-ordinated by OECD.
Facts about trade and jobs
If the G20 economies reduced tariffs and non-tariff barriers (such as import quotas) by 50%, employment of lower-skilled workers would rise by 0.9% to 3.9% over the long run depending on the country, and employment of skilled workers by 0.1% to 4%.
A 50% reduction of tariffs and non-tariff barriers by G20 countries would also raise wages by at least 4.5%.
Full liberalisation of trade in goods and services would help increase average real incomes in developing countries by 1.3%.
Trade is not 'taking' jobs out of developed countries, says Professor Jagdish Bhagwati of Columbia University in this OECD interview. Firms from developing countries are now creating employment in developed economies, he says.
Professor Bhagwati also warns that protectionism would be harmful to world trade and economic recovery, and underlines the importance of World Trade Organization rules in the global trading system.
Launched and co-ordinated by the OECD, ICITE is a joint undertaking of 10 international organisations to seek a better understanding of how trade interacts with employment.
Do imports undermine domestic jobs? Why do companies outsource? Does competition from emerging economies reduce job numbers and lower wages in OECD countries? This basic guide to international trade tackles these questions.
Further trade liberalisation by G20 countries would boost growth, employment and real wages for all countries, according to this report. Using a computable general equilibrium model of the world economy, it takes a fresh approach to estimating the economic effects of trade liberalisation.
The report also examines the effect of reducing barriers to foreign direct investment (FDI) in services.
(Published as OECD Trade Policy Working Paper no. 107)
Korea, host of the G20 summit in 2010, is an example of how market openness brings jobs and economic success to a country, explains the OECD Insights blog. Add your comment!
Open markets, complemented by properly designed employment and social policies, are essential to job creation, says this joint report by the OECD, the International Labour Organization (ILO), the World Bank and the World Trade Organization (WTO).
Open international trade is a catalyst for creating more and better jobs, agreed trade ministers at an OECD meeting in May 2011. Read the main points of this meeting.
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