UNCTAD: WTO Trade reforms could threaten jobs
According to a report recently released by the United Nations Conference on Trade and Development (UNCTAD), the liberalisation of trade in industrial products envisaged under the current WTO talks could potentially increase developing-country exports by $175 billion, however, these gains will only be possible through a development-centred agreement and strategies to reduce short-term structural adjustment costs, such as loss of tariff revenues, reduced output, employment losses and real wage reductions.
The UNCTAD study estimates that current WTO proposals on industrial goods liberalisation could result in an overall welfare gain of up to $69 billion for developing countries, in terms of GDP, and large aggregate employment gains in key sectors, such as textiles, apparel, and leather. But it also warns of a number of downside risks. The average tariff rates that developing countries impose on imports could plunge from the current 12.5% to 3.4%. Although these reforms might help to improve competitiveness in the long run, in the short run such a dramatic change will likely result in losses in employment and production in some sensitive sectors.
