Is the global trade system broken?

On May 9th 2018,  as a featured guest, Professor Nina Pavcnik was invited to The Economist Online Debate Is the global trade system broken?. She provided her perspective of how governments should best help global trade system.

“Before answering how governments should help the losers from free trade, it is important to ask whether governments should help losers from free trade. The argument for it does not have to invoke morality; it can rely on economic principles.

Freer trade raises aggregate living standards in a country, but it generates winners and losers. Those hurt by international trade will likely oppose further liberalisation and call for protectionism, jeopardising the economic benefits of trade to the society as a whole. If governments want support for freer trade -- which is potentially even more important in today’s world of global supply chains -- they need to help those who are left jobless.

So how should governments best help? The answer is obviously context-specific, depending on the country’s level of economic development, flexibility of its labour market, and the structure of its public finances. But several guiding principles are worth keeping in mind. ”

Read more here.