ABSTRACT

This chapter describes a series of impacts of trade on countries and on individual groups of consumers, workers and firms, leaving judgment of the net benefits of trade ultimately to the reader. It examines whether the response to trade is justified by exploring the linkages between trade and labor market outcomes in different parts of the world, extending the focus on Export processing zones. The chapter explores some of the costs and benefits of trade in relation to labor and the environment. The search for the impacts of trade thus shifted to a focus on intermediate goods, to changes in the shares of low-skilled and high-skilled work, and to wage divergence within rather than between industrial sectors. Within developing economies there is also mounting evidence that increased trade is correlated with rising inequality. In the case of fair trade, this injustice is addressed through better prices for poor farmers in developing countries.