Richer nations should address trade’s ‘human downside’: IMF

WASHINGTON: The world’s richer countries should help workers affected by trade liberalization, which has grown increasingly unpopular in the post-financial crisis era, driving a rise in protectionism, according to a report published Monday.

The report, jointly produced by the International Monetary Fund ( IMF) and World Trade Organization (WTO), called for greater job training, stronger social safety nets and other policies that could ease the shocks from shifting industries and greater competition, particularly in the US and Europe.

The report was released in advance of this month’s IMFWorld Bank spring meetings.

“To be sure, job losses in certain sectors or regions in advanced economies have resulted to a large extent from technological changes rather than from trade,” the report said.

“But (the) adjustment to trade can bring a human and economic downside that is frequently concentrated, sometimes harsh, and has too often become prolonged.”

Global trade grew six percent annually from 1960 until 2007 — the start of the global financial crisis — a phenomenon that produced average annual economic growth of three percent during the same period, according to the report.

“Since the early 2000s, however, a slowdown in the pace of trade reform, a post-crisis uptick in protectionism and risk of further reversals have been a drag on trade, productivity income growth.”

According to one study cited by the report, trade with China resulted in the loss of a million US manufacturing jobs and 1.4 million non-manufacturing jobs between 1999 and 2011.

“Too many individuals and communities... have been left behind by trade: There are legitimate reasons for discontent,” the report said.

However, it can be difficult to tell which pressures come from adjusting to trade apart from those caused by technological advances, it said.

The report nevertheless insists that greater progress toward freer trade is “important to reinvigorating global growth.” and