Home / Knowledge / News / Trade reforms are more employment friendly - ILO/WTO
Trade reforms are more employment friendly - ILO/WTO
13
Oct '09
A joint study from the International Labour Organization and the WTO has found that high incidence of informal employment in the developing world suppresses countries' ability to benefit from trade opening by creating poverty traps for workers in job transition.

The study is a product of the collaborative research programme of the ILO International Institute for Labour Studies and the WTO Secretariat. It focuses on the linkages between globalization and informal employment and finds that informal employment is widespread in many developing countries, leaving thousands of workers with almost no job security, low incomes and no social protection. Levels of informality vary substantially across countries, ranging from as low as 30% in some Latin American countries to more than 80% in certain sub-Saharan African and South Asian countries.

“The study confirms what we know from experience, that by promoting complementarity between decent work objectives and trade, financial and labour market policies, developing countries are much better placed to benefit from trade opening, advance the social dimension of globalization, and to cope with the current crisis” said ILO Director-General Juan Somavia. He added that this echoes the recent call by the G20 to implement “recovery plans that support decent work, help preserve employment, and prioritize job growth....and to continue to provide income, social protection, and training support for the unemployed and those most at risk of unemployment.”

Informal employment involves private, unregistered enterprises which are not subject to national law or regulation, offer no social protection and involve self-employed individuals, or members of the same household. In most cases, informality has remained high and has even increased in some countries, particularly in Asia.

“Trade has contributed to growth and development worldwide. But this has not automatically translated in an improvement in the quality of employment. Trade opening needs proper domestic policies to create good jobs. This is all the more evident with the current crisis which has reduced trade and thrown thousands into informal jobs,” said WTO Director-General Pascal Lamy.

The analyses on the effect of trade opening on the size of the informal economy suggest that the effect of trade opening on informality depends crucially on both country-specific circumstances and the design of trade and domestic policies. The empirical analysis in this study shows that more open economies tend to have a lower incidence of informal employment. The short term effects of trade reforms may in the first instance be associated with higher informal employment. But longer terms effects point in the direction of a strengthening of formal sector employment, provided that trade reforms are more employment friendly and the right domestic policies are in place.

Reducing informality can release additional productive forces, enhance diversification and strengthen the capacity to trade internationally. Adverse effects of informality can mainly be related to the absence of productivity gains and low average firm size resulting from barriers to firm growth in the informal economy. Entrepreneurship and risk-taking is reduced when informality is high, partly as a result of badly designed tax systems, weak social protection and poor business regulation. Informality also prevents countries from fully benefiting from trade reforms by creating poverty traps for workers in job transition.


Must ReadView All

India much behind China in containerised cargo capacity

Textiles | On 18th Dec 2017

India much behind China in containerised cargo capacity

India’s total containerised cargo capacity of 8.75 million...

Vietnam’s textile & garment exports cross $26 bn till Nov

Textiles | On 18th Dec 2017

Vietnam’s textile & garment exports cross $26 bn till Nov

Vietnam earned $26.844 billion from textile and garment exports in...

Rotex Fabrics grows production with Bruckner stenters

Textiles | On 18th Dec 2017

Rotex Fabrics grows production with Bruckner stenters

The South African company, Rotex Fabrics, which is a knitter, dyer,...

Interviews View All

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
68.1%
No
13.8%
Skip
18.1%

Total Votes: 94

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.8%
No
29.8%
Skip
7.4%

Total Votes: 94

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
9.6%
Skip
3.2%

Total Votes: 94

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.9%
No
8.5%
Skip
9.6%

Total Votes: 94


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search