Why trade opening works for welfare

Trade has made enormous contributions to growth, development and prosperity. As part of a virtuous circle of policy and circumstance, it has helped to lift millions out of poverty and spread the benefits of higher living standards. Trade has brought nations closer together, fostering mutual understanding and contributing to world peace. But this is not the whole story. Concerns over fairness, income distribution, social justice and jobs have intensified in recent times, particularly since the 2007-2009 Great Recession. Growing problems in these areas risk eroding public support for more open trade. The legitimacy of the market-based system will be increasingly questioned if the benefits of progress are not more equitably shared. We should, however, be clear about where trade and trade policy fit into the picture. Trade is only part of a much bigger context. It obviously cannot deliver on its own the full range of benefits to be derived from sound economic and social policies. The challenge is to construct coherent national and international policy frameworks that deliver inclusive growth.