Groups working to complete a study for the Group of 20 nations say they expect to write that trade liberalization exposes countries to external shocks and can increase unemployment in the short run, but it tends to have long-term benefits for growth and can act as a non-debt-creating source of stimulus.
The groups preparing the study include the Organization for Economic Cooperation and Development, the International Labor Organization, the World Bank and the World Trade Organization. The four organization earlier were charged with reporting on the issues for the G-20 Summit in Seoul, Korea, Nov. 11-12.
Raed Safadi, deputy director of the OECD's Trade and Agriculture Department, says the 42-page report will be issued Nov. 1 with a joint press release from the four organizations that collaborated on the document.
Safadi said that one of the main themes of the report will be that conclusion of the WTO's Doha Round would send a clear signal to the private sector concerning the direction of trade policy and encourage greater productive investment.
Many countries that used fiscal stimulus in response to the global economic crisis now face fiscal austerity, he said. As countries repair their balance sheets, conclusion of the Doha Round would likely offer a short-term boost to the recovery, Safadi said, that does not incur greater debts. He noted that while corporate profits are up, investment and job growth have been hampered by a lack of confidence. Safadi added that conclusion of the Doha Round would boost confidence, especially with regard to the next generation of services regulation, and turn profits into jobs.
