Several global financial institutions on Monday urged economies all over the world to advance open trade in an inclusive way.
“The role of trade in the global economy is at a critical juncture,” said a joint report released by the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO).
Increased trade integration has helped to drive economic growth, enhance productivity, lower prices and improve living standards, said the report.
However, trade is leaving many individuals and communities behind, notably in advanced economies, it said.
These economies have been incompetent in addressing trade shocks such as job losses, though job losses in certain sectors or regions have resulted from technological changes to a large extent, rather than from trade, said the report.
In face of trade shocks and the absence of policies as countermeasures, the public has become more skeptical about the benefits of open trade, especially in advanced economies, it said.
It also noted that the sharp slowdown in global trade in recent years is both a symptom of and a contributor to low economic growth, and that trade openness has slowed down sharply in recent years as trade restrictions in some areas remain high and new restrictions continue to grow since the global financial crisis.
The report called on economies to improve social safety nets and labor market policies, such as job search assistance and training programs.
It called for further trade integration by lowering restrictions on agricultural trade, reforming services and digital trade, upgrading bilateral and regional trade agreements, and mitigating trade adjustment costs.
It also emphasized the importance of the WTO in the global trading system, saying that its dispute settlement function has proved to be a powerful tool for enforcing trade rules.