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1.
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Rely, wherever possible, on generally available measures to address adjustment costs, including through the social security and tax system, in order to help improve the benefits from openness while reducing adjustment strains.
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2.
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Ensure that targeted adjustment measures, should these be considered necessary for reasons of economic efficiency or political economy, are:
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2.1
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time-bound, with a clear exit strategy
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2.2
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decoupled from production
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2.3
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aimed at re-employing displaced workers
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2.4
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compatible with general safety net arrangements
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2.5
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cost effective
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2.6
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transparent and accountable
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3.
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Foster an adjustment-enabling environment, through the promotion of macroeconomic stability and growth, which supports the effective functioning of labour markets and the economy in general, and which, particularly in the case of developing countries, complements the process of trade liberalisation by:
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3.1.
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removing anti-export bias and maintaining appropriate exchange rate policies
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3.2.
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encouraging tax reforms to offset declines in government revenue resulting from tariff reductions.
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4.
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Adopt sound labour market policies which facilitate the reallocation of workers towards higher productivity employment and so help economies - and their citizens - reap the gains from trade, and which encompass:
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4.1
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income-replacement benefits which provide adequate income security for displaced workers while fostering their reintegration into employment. Thus, welfare benefits should support work incentives and not be used as a way to withdraw displaced workers from the labour force (as has often been the case with early retirement and disability schemes);
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4.2
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active labour market programmes – including job-search assistance, counselling, training, moving allowances and proactive measures in anticipation of mass layoff – which entail:
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4.2.1
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active bipartite cooperation between management and workers’ representatives and wider tripartite cooperation with the government in accordance with national practice
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4.2.2
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realistic assessment of workers’ labour market opportunities and adjustment assistance needs
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4.2.3
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useof external specialists in the case of large-scale layoffs
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4.2.4
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programmes that are of sufficient duration to provide real support while also discouraging complacency
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4.2.5
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complementary support via income-replacement benefits
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4.3
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employment protection policies which find a balance between lessening adjustment costs while not restricting business dynamism
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4.4
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flexible wage setting systems, pension portability and fluid housing markets
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4.5
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education and training systems that foster the development of human capital and help ensure that labour skills meet evolving labour market needs.
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5.
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Foster a sound regulatory and competition environment which permits transformation within firms as well as entry and exit across sectors by facilitating mergers and shifts in corporate culture, keeping regulatory barriers on enterprises to the necessary minimum and reducing the trade-distortive effects of domestic regulation through the reinforcement of:
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5.1
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transparency
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5.2
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non-discrimination
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5.3
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avoidance of unnecessary trade restrictiveness
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5.4
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international harmonisation of standards
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5.5
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streamlined conformity assessment
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5.6
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vigorous application of competition principles
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6.
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Foster a strong institutional and governance framework that will favour structural reform, while also enhancing public understanding and acceptance of reform measures, via:
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6.1
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effective ex-ante policy evaluation, including analysis of whether proposed structural reform is in the overall interests of the community
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6.2
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independent review processes to ensure that benefits will outweigh costs while avoiding conflicts of interest
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6.3
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mid-term and ex-post evaluation to help ensure that policies will be modified if necessary in light of actual experiences as well as any unanticipated difficulties
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6.4
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effective social dialogue based on a well functioning consultative process between the government and civil society, including the private business sector
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6.5
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sound public institutions for managing the services and incentives provided to investors, importers and exporters.
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7.
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Adopt liberal trade policies, which support structural adjustment by contributing to economic growth, fostering competitiveness and innovation, improving access to essential imports and encouraging synergies between countries with different areas of comparative advantage, and which:
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7.1
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maximise the particular welfare and flow-on benefits which arise from the liberalisation of trade in services;
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7.2
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are implemented over a time period long enough to enable affected parties to adjust but short enough to avoid back-tracking;
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7.3
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rely sparingly on the use of safeguards and with a careful assessment of whether their potential benefits in providing breathing space for – and greater public acceptance of – structural adjustment justifies the cost they entail;
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7.4
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maximise opportunities for associated flows of foreign direct investment.
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8.
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Undertake reforms across different policy areas in a complementary, broad-based way, in order to maximise cross-policy synergies and to reduce resistance to structural change, by helping ensure that those adversely affected by one reform may benefit from another.
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9.
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Foster bilateral and regional initiatives, where regulatory cooperation can foster opportunities through trade or ease adjustment strains in particular sectors, and where trade-related adjustment and opening can be undertaken among bilateral or regional partners as a transition, or complement, to wider multilateral commitments.
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10.
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Foster multilateral cooperation in the adjustment-related and interlinked areas of:
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10.1
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trade and finance, by avoiding mutually destructive trade policy retaliation, helping lock in domestic reform, while addressing in particular adjustment- related concerns of developing countries, via:
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10.1.1
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a sustained commitment to the trade-liberalising and rules-strengthening objectives of the Doha Development Agenda
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10.1.2
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the effective application of special and differential treatment for developing countries
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10.1.3
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strengthened disciplines on the provision of officially supported export credits
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10.1.4
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enhanced cooperation between the WTO, the World Bank and the IMF to ensure greater coherence in global economic policy making
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10.2
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Capacity building, via:
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10.2.1
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effective coordination between the WTO, IMF, World Bank, ILO, bilateral donors and other multilateral agencies to help reinforce developing country institutional and supply-side capacities
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10.2.2
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co-ordination of donor activities
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10.3
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Corporate responsibility and core labour standards, via:
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10.3.1
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ongoing efforts to enhance the effectiveness, transparency and timeliness of the implementation of the OECD Guidelines for Multinational Enterprises
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10.3.2
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ongoing application of the OECD guidelines relating to corporate social governance in the provision of official support for export credits
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10.3.3
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ongoing application of core labour standards and decent work promotion, notably by the promotion of the ratification of the relevant conventions and through continued enforcement of the ILO Declaration on Fundamental Principles and Rights at Work
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