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Role Of Trade In Global Economy At Critical Juncture, IMF, WB & WTO Warns

A slowdown in the pace of trade reform since the early 2000s, a post-crisis uptick in protectionism, and the risk of further reversals have weakened trade, productivity, and income growth in the global economy, a joint report by the International Monetary Fund, the World Bank and the World Trade Organization warned on Monday.

"The role of trade in the global economy is at a critical juncture," the three organisations said in the report that was launched in Berlin.

Trade is also leaving too many individuals and communities behind, notably also in advanced economies, the report said. Adjustment to trade can bring a human and economic downside that is frequently concentrated, sometimes harsh, and has too often become prolonged, it added.

"Recent evidence on the effect of import competition on manufacturing jobs in certain locations in Europe and the United States demonstrates how harsh such impacts can be in the absence of accompanying policies," the report said.

By adopting right policies that ease adjustment to trade and strengthen overall economic flexibility and performance, countries can benefit from the great opportunities that trade brings and lift up those who have been left behind, the report said.

Policies that help to sustain strong economic and job growth can ease the costs of adjustments to trade, said the report, which also stressed on the importance of domestic policies to address such events.

Efficient labor market policies, education systems, social policies in areas such as housing, credit, infrastructure are also important to deal with dislocations, it added.

"Further trade integration is important to reinvigorating global growth and advancing an inclusive trading environment," the report said.

"A strong global trading system centered on the WTO remains critical," the report stressed.

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