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.
Out now Policy Priorities for International Trade and Jobs
How does trade interact with employment? The International Collaborative Initiative on Trade and Employment (ICITE)* brings together 10 international organisations to undertake research, promote discussion and develop policy-relevant conclusions.
This book features highlights from the first two years of work, as selected by ICITE partners, including regional, country and thematic studies.
Trade improves employment and wages through growth
Of the 14 main studies undertaken since 2000 reviewed in the publication Policy Priorities for International Trade and Jobs, all 14 have concluded that trade plays an independent and positive role in raising incomes.
Trade - both exports and imports - contributes to creating better jobs
Over the 1970-2000 period, manufacturing workers in open economies benefitted from pay rates that were between 3 and 9 times greater than those in closed economies, depending on the region.
In Chile, workers in the most open sectors earned on average 25% more in 2008 than those in low-openness sectors.
Fears of the impact of offshoring may be exaggerated. Studies for the United Kingdom, United States, Germany and Italy demonstrate that off-shoring of intermediate goods has either no impact or, if any, a positive effect on both employment and wages.
In a broad sample of open and closed economies around the world, examined over a 30-year period, open economies significantly outperformed closed ones in working conditions, including fatal accidents and life expectancy. Labour rights are also generally better respected.
In Japan, trade contributed to a reduction in the number of hours worked and in Chile it interacted with unionisation in the export sectors to raise wages for workers.
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.
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)
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).
* ICITE is comprised of: the African Development Bank, Asian Development Bank, Economic Commission for Latin America and the Caribbean, Inter-American Development Bank, International Labour Organization, Organization of American States, Organisation for Economic Co-operation and Development, United Nations Conference on Trade and Development, World Bank and World Trade Organization. The views expressed here do not necessarily reflect those of the ICITE partner organisations.