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![Page 1: Making Trade Work for All - OECD trade work for...Making Trade Work for All Meeting of the National Focal Points for Policy Coherence for Development 26th October, 2017 Julia Nielson](https://reader034.vdocuments.us/reader034/viewer/2022050421/5f9050e34ee0060bd84416f7/html5/thumbnails/1.jpg)
Making Trade Work for All
Meeting of the National Focal Points for Policy Coherence for Development
26th October, 2017
Julia Nielson
Trade and Agriculture Directorate, OECD
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
In developed countries, many citizens view
globalisation as a threat rather than an
opportunity
Source: IpsosGlobal @dvisor: Power to the People? Part 2; January 2017.
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SWE
POL
GBR
ESP
HUN
KOR
JPN
ISR
CAN
OECD
DEU
MEX
USA
BEL
AUS
TUR
FRA
ITAThreat
Opportunity
60 50 40 30 20 10 0 10 20 30 40 50 60
Percent of population viewing globalisation as a threat or opportunity
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
• 60% Chinese and 52% Indians think involvement in the
global economy is a good thing – New markets
– Opportunities for growth
• Support for trade and its role in job creation is also
strong in, e.g., – Viet Nam, Malaysia
– and Chile, Peru, Mexico
Why does this matter?
This is much less true among developing
countries
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
In global trade, what other countries do matters
Source: OECD METRO Model and OECD calculations.
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
Implementing Trade Facilitation
Measures
% of GDP
Imposing Trade Restrictions
in Major Economies
World Major economies imposing restrictions Spillovers to other economies
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So what’s going on?
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
Lower and lowest incomes have increasingly
been left behind
Source: OECD (2015), In It Together: Why Less Inequality Benefits All
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1985 1990 1995 2000 2005 2010
Bottom 10% Bottom 40% middle 50-90% Top 10%
Trends in real household incomes at the bottom, the middle and the top, OECD average, 1985 = 1
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
Taxes and social benefits redistribute less
Source: T. Piketty (2013), Le Capital au XXIe siècle, Les Livres du Nouveau Monde.
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
Productivity gaps are widening and wages
stagnating at laggard firms
Source: OECD November 2016 Economic Outlook.
Real compensation per workerLabour productivity
Index, 2001 = 100 Index, 2001 = 100
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
Technology and digitalisation are also bringing
profound transformations…
Source: Acemoglu, D. and P. Restrepo (2017), “Robots and Jobs: Evidence from US Labor Markets”, NBER Working Paper No. 23285.
Industrial robots per thousand workers in the United States and Europe
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What can we do?
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
• Trade barriers do not help low income households
• In a world of GVCs, imports mean exports and jobs
• Using trade barriers to save jobs is ineffective and
inefficient – Need to protect workers, not jobs
Cutting off trade is not the answer
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
• The reality is that trade alone did not cause all of the
problems that concern so many people today, and trade alone
will not solve them either.
• Governments need to act across many fronts simultaneously,
recognising that – the impact of global trade on people depends on the national
policy settings of the countries in which they live, and
– That the impact of trade also depends on a range of other
types of international economic co-operation. (rules of the
road)
So what can be done to address the legitimate
concerns of people?
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
1. Create the environments where the benefits from trade
can materialise through domestic policies that
encourage opportunity, innovation, and competition. – Cut unnecessary trade costs (facilitation, services)
– Invest in capacity • Physical (including digital)
• People (early childhood to lifelong learning)
Making trade work for all
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
2. Do more to bring everyone along
– Full range of investments in inclusive growth
– Target lagging regions
– Another look at the toolkit for the digital future
Making trade work for all
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
3. Make the international system work better,
harnessing full range of tools of international
economic cooperation
– From binding rules, to standards and guidelines, to
transparency and dialogue
– Fill the gaps in the rules and do more to ensure that
everyone plays by them
– Trade agreements can play a role, but depends what
you want to do
– And how trade agreements are done also matters • Making trade a more open conversation
Making trade work for all
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Trade and Agriculture Directorate | Organisation for Economic Co-operation and Development (OECD) | www.oecd.org/tad | [email protected]
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