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Market Opening, Growth and Employment

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Abstract

What can further market integration contribute to growth and employment? A series of hypothetical trade reform scenarios explores what countries at different levels of development can expect to gain from reforming tariffs, non-tariff barriers, trade facilitation and domestic support to agriculture. Simulations of multilateral and regional trade agreements with the OECD METRO model show that positive effects are higher when more countries participate in trade integration because it broadens market opportunities, widens the range of products at lower prices, and reduces trade diversion. Smaller economies especially benefit. Firms in these economies can better specialise in international production networks as they have access to larger and more differentiated markets and also benefit from enhanced market access on the products they already produce. While trade integration boosts demand and lifts wages and factor returns, the required production adjustments also leads to reallocation of workers between sectors. The analysis highlights some of the distributional implications and emphasises the need for labour force adjustment policies to accompany trade integration.

Suggested Citation

  • Oecd, 2018. "Market Opening, Growth and Employment," OECD Trade Policy Papers 214, OECD Publishing.
    • Handle: RePEc:oec:traaab:214-en
    DOI: 10.1787/8a34ce38-en
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    Cited by:

    1. Danut? Adomavi?i?t?, 0000. "Research On Supply Chain Security Management Initiatives," Proceedings of Economics and Finance Conferences 11413168, International Institute of Social and Economic Sciences.
    2. González-Garrido, A. & Gaztañaga, H. & Saez-de-Ibarra, A. & Milo, A. & Eguia, P., 2020. "Electricity and reserve market bidding strategy including sizing evaluation and a novel renewable complementarity-based centralized control for storage lifetime enhancement," Applied Energy, Elsevier, vol. 262(C).
    3. Campbell, Robert M. & Anderson, Nathaniel M. & Daugaard, Daren E. & Naughton, Helen T., 2018. "Financial viability of biofuel and biochar production from forest biomass in the face of market price volatility and uncertainty," Applied Energy, Elsevier, vol. 230(C), pages 330-343.

    More about this item

    Keywords

    agriculture support; Asia; CGE model; income distribution; International trade; market access; regional trade agreements;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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