WTO: 2007 NEWS ITEMS

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In the joint study, the two Secretariats provide an overview of what can be said, and with what degree of confidence, on the relationship between trade and employment.  The joint study distinguishes itself from other surveys by focusing on the connections between trade policies and labour and social policies and by bringing together different streams of literature, for example trade literature, labour market literature, public finance literature and education literature.  The joint study does not give policy advice but is intended to help policymakers think about policy design and in particular about trade-offs that might be implied.

A number of messages from the joint study can be highlighted, including;  that while it has been known for some time that trade both creates and destroys jobs, according to recent insights in economic thinking, trade creates and destroys jobs in all sectors involved in trade – this implies that policymakers cannot simply target import competing sectors if they wish to assist workers affected by trade-related job loss;  that the changing nature of trade and in particular the role of offshoring is likely to make it increasingly difficult for policymakers to predict which jobs are at risk and which jobs will be in demand in the near future;  and, that modern economies need constantly to reallocate resources but workers value security.  On the latter point, while there may be reasons to believe a trade-off exists between providing insurance for workers against adverse professional events on the one hand and economic efficiency on the other, this trade-off apparently does not need to be steep.

Another focus in the joint study concerns increases in inequality.  While trade is often blamed for this phenomenon, which appears to impact hardest on the low-skilled, there is broad agreement that in fact technological change and not trade is the main driver of these increases in inequality.  That said, trade is often the vehicle carrying technology into societies and since technological change is abstract, there is sometimes a tendency to 'shoot the messenger'.  As for the effects of trade reform on employment and wages particular to developing countries, the study's main message is that knowledge on this issue is highly incomplete.  This is due to insufficient understanding of what happens in the informal economy.

A number of points follow clearly from the joint study:  first, that trade policy interacts with other policy areas, including labour market policy, education policy and redistribution policy; second, that coherence among these policy fields helps to optimize the outcomes of trade liberalization in terms of growth and employment and is likely to have positive effects on public support for trade reform; and, third, that research to support increased policy coherence could have high pay-offs.

Book launch

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   Opening remarks and presentation by authors       Help

Speakers:

  • Patrick Low
    Director, Economic Research and Statistics
    Division, WTO

  • Gerry Rodgers
    Director, International Institute for Labour Studies, ILO

  • Marion Jansen
    Counsellor, Economic Research and Statistics Division, WTO

  • Eddy Lee
    Fellow, International Institute for Labour Studies, ILO

   Discussants' comments       Help

Speakers:

  • Comments: first discussant
    Olivier Cadot
    Professor, Université de Lausanne

  • Comments: second discussant
    C. Trevor Clarke
    Ambassador, Permanent Mission of Barbados to the United Nations

   Comments and Questions       Help

Chair: Gerry Rodgers
Director, International Institute for Labour Studies, ILO

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