Monday, May 7, 2012

Trade benefits people's lives - How does one communicate this?

Pascal Lamy, Director General of the WTO recently spoke at the Minnesota Economic Club on how trade benefits the lives of people and challenging the myth that "protectionism" pays. I found a paragraph on the importance of communicating the benefits very pertinent:
"There is another important part of the trade agenda for which change is urgently required — how we tell the story of trade. In the communication age, you cannot persuade people without a compelling narrative.  One can build a very strong case for trade. We know as well that closing trade down is economically destructive and that instead of protecting jobs, protectionism actually destroys them. Yet, the political discourse on trade in the United States, and in many other countries, is cause for deep concern. Foreign companies and countries seemingly do not “play by the rules”. Imports are demonized. Most worrisome of all, trade is seen as a catalyst for job loss rather than job creation. Yet, the irony is that trade has been and continues to be an important American success story.
The link between trade and jobs is complex and when making the case for trade we need to acknowledge that there are those who are hurt by trade. We need to support programmes that help get such people back on their feet. But equally, we know that those countries practising open trade policies grow faster than those with closed policies. The World Bank tells us that they grow three times faster. Our joint study with the ILO said that the efficiency gains from trade lead to positive overall employment effects in numbers of jobs and the level of wages. We also know that jobs tied to exports pay better, 6 per cent better on average in the United States and 18 per cent better in Minnesota. The OECD points out that any link between unemployment and import penetration is tenuous. A survey of 23 OECD countries reveals that in 1970 the average unemployment rate in those countries was 3 per cent and the import penetration rate was just over 10 per cent. Today, the import penetration average has jumped to 45 per cent while unemployment, though elevated in this post-crisis economy, is at 8 per cent."
Lamy stresses the role of the WTO Secretariat in getting this message across:
So why is this story not getting out? We at the WTO accept our share of the blame. We can and will do better at explaining how trade improves the lives of most people around the world. Governments and universities need to do more as well. And, frankly, businesses need to lift their play as well. It is companies, after all, which engage in trade, which seek new markets and which benefit from access gained to those markets.
We in the WTO Secretariat have been working hard to establish closer contacts with the business community. We have been hosting seminars at which we explain how we work and why things sometimes don’t work. We have increasingly offered businesses the chance to tell us how we can do better and we plan to do more on this front in the future.
True, we are a member-driven organization and decisions are taken by consensus. But there are things that we in the Secretariat can do to help as well. One of these things is to provide you with better data. Our Made in the World Initiative, for example, has brought to light a great deal of information on how global supply chains work and the impact they have on trade, growth and development. This sort of information can lead to more informed debate and better policy decisions."
The communication disconnect does exist. Has the information and benefits of international trade percolated to the national, state and local levels? Does it seem being too irrelevant to people's daily lives? As developing countries integrate into global economies the relevance and critical importance of international trade will loom large with diverse impacts, benefiting some while disrupting others. Has this been understood and communicated by the domestic leadership to their people? Domestic politics is often preoccupied with varying challenges of differing complexity. The debate on trade often gets intermingled with the issue of protecting one's domestic constituent's interests. Ofcourse, to expect that international trade will be  beneficial in all sectors would be naive. However, to demonise it and fall back into the trap of protectionism too would be disastrous. How can the benefits of trade to people's lives (everyday lives) as opposed to statistics like GDP, growth and macro economic indicators) be communicated effectively?  Is there a way of bringing the benefits of trade to the sub national level and local levels. With democratic decentralisation and local governments being strong in many countries, is there a way to communicate this message to local governing units? After all they represent the pulse of the people also. Is there an interesting way of telling this story?

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