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139 Int'l Lab. Rev. 281 (2000)
Trade Liberalization, Employment and Global Inequality

handle is hein.journals/intlr139 and id is 291 raw text is: International Labour Review, Vol. 139 (2000), No. 3 Trade liberalization, employment and global inequality Ajit K. GHOSE* T rade liberalization - which, together with marked improvements in transport systems and communications/information technologies, has been driving globalization -has suddenly acquired the status of a much- maligned monster. Industrialized nations, which earlier vigorously preached the virtues of free trade, now worry about its vices. Many developing countries feel marginalized in the emerging world economy and wonder whether their fear of free trade was not justified after all. Economists are engaged in (as yet inconclusive) debates on the rights and wrongs of trade liberalization and popular opposition to it has grown so much that a crisis of legitimacy looms. Three main concerns underlie these developments. First, it is suspected that trade liberalization has been a major contributory factor in the growing international economic inequality. Second, it is widely believed that trade lib- eralization has had serious adverse effects on employment and the wages of low-skilled workers in industrialized countries. Third, there are apprehen- sions that trade liberalization is leading to a deterioration of global labour standards.' Unfortunately, in the popular view, these perfectly legitimate concerns tend to assume the status of well-established facts. The political pressures thus generated now threaten to stall the process of trade liberalization. At the international level, there is growing demand for global enforcement of envi- ronmental and labour standards. At the national level, non-tariff barriers to trade have tended to increase in the industrialized world. Labour market pol- icies in some industrialized countries have also been increasingly geared to a cheapening of unskilled labour for the employers through various forms of wage subsidies, the reform of social security and unemployment benefit sys- tems, and the flexibilization of labour markets. *ILO, Geneva. There is perhaps a fourth concern about global economic instability which arises from the experience of the economic crises of the 1990s. But there is broad consensus now that the crises were generated by the erratic behaviour of short-term capital flows which did not have much to do with trade liberalization. Copyright © International Labour Organization 2000

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