International trade affects the price and availability of practically everything we buy. It also plays a role in many other domains, including jobs, the environment and the fight against poverty. Trade, in turn, is affected by a host of factors ranging from natural resources to fashion.

OECD Insights: International Trade argues that prosperity has rarely, if ever, been achieved or sustained without trade. Trade alone, however, is not enough. Policies targeting employment, education, health and other issues are needed to promote well-being and tackle the challenges of a globalised economy.

International trade influences a whole range of activities including jobs, consumption and the fight against poverty. It also affects the environment and relations among countries. In turn, trade is shaped by a host of influences ranging from natural resources to fashion.

Trade-related issues can give rise to strong feelings, and trade measures such as limiting imports and exports are often called for to respond to major economic problems. An understanding of the benefits and downsides of trade, and of what trade policy can and cannot achieve, will help us to form our own opinions on debates about international trade.

This book from the OECD Insights series looks at the forces shaping world trade and trade’s impact on our lives and our societies.

Did you know?

• The share of world trade of OECD countries dropped from 73% in 1992 to 64% in 2008.
• If tariffs were eliminated worldwide, more than half of the benefit would go to developing countries.
• A 10% increase in trade is associated with a 4% rise in per capita income.
• The number of signatures needed to import goods varies from around 3 in some regions to 30 in others.
• On average, 95% of the food we eat is grown in the country where we live.
• When Adam Smith wrote The Wealth of Nations, the term “economics” didn’t exist.

Read International Trade: Free, Fair and Open? Online

INTRODUCTION
International trade influences a whole range of activities including jobs, consumption and the fight against poverty. It also affects the environment and relations among countries. In turn, trade is shaped by a host of influences ranging from natural resources to fashion.

 Trade-related issues can give rise to strong feelings, and trade measures such as banning or limiting imports are often called for to respond to major economic problems. An understanding of the benefi ts and downsides of trade, and of what trade policy can and cannot achieve, will help us to form our own opinions on debates about international trade. ...

TRADE AND THE CRISIS
Trade, like every other aspect of the economy, has been deeply affected by the global recession that started to emerge in the wake of the 2008 financial crisis. Trade is not at the origin of the crisis, but since it binds economies closely together, it helps to spread developments from one country to another - the negative developments as well as the positive.

Given the urgent need to tackle rising unemployment, the temptation for some policy makers and parts of the media is to argue that the priority is to protect the national economy by reducing imports, reserving government contracts for domestic firms, refusing to help companies who invest abroad, and so on.

This approach is based on the seriously flawed premise that any country can rely solely on its own natural, economic and human resources to produce everything it needs, at a price its population can afford to pay.

Experience has shown that international trade can make a major contribution to improving the living standards of people throughout the world. So although an inward-looking, individualist approach may seem attractive to some in the short term, a co-ordinated international commitment not to engage in protectionist actions would produce a much more effective, longer-lasting solution. ...

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