What is ‘inclusive trade’, and how can trade policies improve workers’ lives?

ade and globalization have contributed to jobs, market opportunities, higher incomes and improved working conditions.

Yet, they have also exacerbated longstanding challenges such as wage inequality, poor working conditions and informal employment.

Digital tech and the green transition must not undermine workers’ rights, but should offer an opportunity for a more inclusive approach to global trade.

Globalization and trade liberalization have done much to raise living standards and set more people on a path to prosperity. However, these benefits have not been evenly distributed, exacerbating existing labour challenges.

The ongoing green transition, digitalization and geopolitical shifts are likely to lead to further disruption and more people could be left behind, a new white paper from the World Economic Forum and the Geneva Graduate Institute cautions. The paper, Trade and Labour: Rethinking Policy Tools for Better Labour Outcomes, explores the persistent labour challenges hampering inclusive trade and t
he approaches that can improve workers’ rights and wellbeing, and build more sustainable and resilient supply chains.

Labour challenges persist

While driving economic growth, trade liberalization has also been linked to rising wage inequality, particularly in developing economies, downward pressure on working conditions and higher levels of informal employment.

A fifth of employees today live in poverty due to receiving inadequate wages for their work (21%), and informal employment affects close to two-thirds (61%) or two billion of the global workforce. Four billion have no social protection whatsoever and more than 28 million people are subject to forced labour. Workers in developing economies are particularly exposed to precarious employment, leaving them vulnerable to economic shocks and instability.

These conditions persist despite policymakers’ and organisations’ increased focus on improving labour standards throughout supply chains, for example through the adoption of due diligence frameworks and t
he inclusion of labour provisions in regional trade agreements.

Source: World Economic Forum