Global Trade: Guarding against protectionism, supporting structural change

Open markets facilitate the international division of labour allowing resources to be used more efficiently and productivity gains to be made. At an aggregate level, the effects of globalisation are almost exclusively positive. However, the impact at regional, sector and individual level is much less uniform. In Europe, for example, it is impossible to identify any clear pattern as far as the effects of trade on employment and incomes are concerned. The government should use the existing social security systems and labour market policy tools to cushion the blow of any negative effects at a disaggregate level. In order to counteract the recently increased calls for protectionist measures, international organisations should be strengthened and further measures taken to promote open markets. Also, efforts to make more information on the macroeconomic advantages of globalisation available to the public should be used to counteract this trend.