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The Impact of Trade Liberalisation on Jobs and Growth: Technical Note

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  • OECD

Abstract

This report shows how more open markets in goods and services can contribute to creating jobs and increase incomes. Reducing tariffs and non-tariff barriers can help in the short run where the economic crisis has led to significant involuntary unemployment by reducing costs of imported products for consumers and by providing new market opportunities for exporters. Taking a longer term view of a more healthy global economy, lasting gains can be found from reallocation of resources across sector and from productivity growth. Reducing barriers to foreign direct investment in services is found to particularly increase demand for higher skilled labour, while the offshoring of services is not found to shift jobs abroad. The report presents in detail new results based on two large scale global computable general equilibrium models, one for goods and one for services, using novel approaches to assess the effects of reducing trade costs related to non-tariff measures, and to assess the effects of regulatory impediments to foreign direct investment in services. The analysis disentangles the effects of actions that the G20 economies could take from the potential effects of global tariff liberalisation efforts in which all countries would participate.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Trade Policy Papers with number 107.

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Date of creation: 31 Jan 2011
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Handle: RePEc:oec:traaab:107-en

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Related research

Keywords: services; foreign direct investment; non-tariff measures; trade liberalisation; general equilibrium models; global economy;

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Cited by:
  1. Joseph Francois & Olga Pindyuk, 2013. "Modeling the Effects of Free Trade Agreements between the EU and Canada, USA and Moldova/Georgia/Armenia on the Austrian Economy: Model Simulations for Trade Policy Analysis," FIW Research Reports series IV-003, FIW.
  2. Francois, Joseph & Manchin, Miriam & Tomberger, Patrick, 2013. "Services linkages and the value added content of trade," Policy Research Working Paper Series 6432, The World Bank.
  3. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2012. "CGE modeling of market access in services," Policy Research Working Paper Series 6106, The World Bank.
  4. Christen, Elisabeth & Francois, Joseph & Hoekman, Bernard, 2013. "Computable General Equilibrium Modeling of Market Access in Services," Handbook of Computable General Equilibrium Modeling, Elsevier.

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