World Bank, IMF, and WTO Stand Together for Global Trade

WASHINGTON, October 19, 2016–For the first time ever, on October 7, the World Bank Group, International Monetary Fund and World Trade Organization came together to address one topic – global trade. The weight of the discussion held during the IMF-WBG Annual Meetings was not lost on the packed atrium at IMF headquarters as the leaders of the three institutions – Jim Yong Kim, Christine Lagarde and Roberto Azevedo – issued a joint call to avert a downward spiral of low growth and protectionism.

The event, Making Trade an Engine of Growth for All, comes at a time when trade and globalization are taking up buckets of newspaper ink. Domestic gripes and popularized backlash against global trade are changing the course of elections and political votes in the US and Europe.

While Kim, Lagarde, and Azevedo acknowledged public concerns over trade, they also reiterated that global growth and ending extreme poverty cannot happen without more robust trade. Lagarde stated very clearly, “We all stand for trade,” while Azevedo cautioned, “It’s easy to find a scapegoat in trade.  But the wrong diagnosis will lead to the wrong medicine.”

The main takeaway from the conversation is that the world needs policies that are designed directly in response to challenges seen all over the world – including job losses and persistent inequality. In addition, governments and global institutions have a responsibility to make a well-informed and balanced case for trade.

Panelists at the event echoed these sentiments and added that trade has become an increasingly political issue. According to Lord Peter Mandelson, Chairman, Global Counsel and former European Trade Commissioner, “Trade has done a tremendous job of growing the global pie. Politics have not done such a great job of distributing it. The idea that we would be better off without globalization is a false conclusion.”

A solution, according to Chrystia Freeland, Canada’s Minister of International Trade, is that “Politicians have to build a positive, very concrete case for an open society. Being open to the world economy is also about being open to people.” 

Chrystia Freeland, Canada's Minister of International Trade, participates in an October 7, 2016 panel discussion at the IMF.

Douglas A. Irwin, John Sloan Dickey Third Century Professor in the Social Sciences in the Department of Economics at Dartmouth College, suggested that although many people are angry, many also recognize the benefits of global trade. “Public opinion polls show people are almost two-thirds to one thirds in favor of trade. The issue is that people who are in favor of trade are much less vocal than those opposed.”

While much of the conversation focused on those “left behind” by globalization in developed economies, Ernesto Zedillo, former President of Mexico and Director for the Study of Globalization and Professor in the Field of International Economics and Politics at Yale University added advice for developing countries seeking to navigate the complex playing field of international trade.

“We have to use all the knowledge, experience and research to tell emerging countries – don’t play defense anymore,” he said. “Play offense. You have the means to be more competitive. You have the means to move closer to the technological frontier.”

Today’s economy is unquestionably global, and trade has been critical to poverty reduction around the world.  With the support of three major multilateral institutions, developing countries can become more integrated into the global system and trade can continue to play a role in lifting millions more people out of extreme poverty.