IMF study warns free trade seen as benefiting 'only a fortunate few'

[Eugene]

Source: The Guardian

IMF study warns free trade seen as benefiting 'only a fortunate few'

Policymakers must address needs of trade-affected workers
International Monetary Fund’s new World Economic Outlook says

Larry Elliott
Tuesday 27 September 2016 16.32 BST

The International Monetary Fund has warned that free trade is increasingly seen as benefiting only the well-off and that help is needed for those whose job prospects have been damaged by globalisation in order to put fresh momentum behind removing barriers to international commerce.

In a chapter from the half-yearly World Economic Outlook study released ahead of its annual meeting next week, the IMF said the weakness of the global economy, rather than a wave of protectionism, had been largely responsible for the sharp slowdown in trade growth over the past four years.

But it said the uptick in protectionist measures since the financial crisis had “not been innocuous” and stressed that anti-trade sentiment could harden.

The IMF noted there had been studies showing “significant and long-lasting adjustment costs” for those whose job opportunities had been impaired by the structural changes associated with the trend, even if the lower prices generated by globalisation helped those on low incomes.

[font size=1]-snip-[/font]

Read more: https://www.theguardian.com/business/2016/sep/27/international-monetary-fund-world-economic-outlook-globalisation-free-trade

[elleng]

1. No sh*t, sherlock!

[Warpy]

2. Well, duh

Wages have been driven below subsistence in a lot of the First World thanks for completely lopsided "free trade" agreements. In addition, industry has been stripped out of some countries, most notably the US, to the point it's a national security issue. We no longer make enough basic items to keep us going even in a minor blockade situation, let alone a shooting war.

"Free trade" has only increased the brutality inherent in unregulated capitalism. The IMF needs to know that ordinary people aren't nearly as stupid as they seem to think they are and that "significant adjustment" has now lasted a whole generation and "low prices" failed to materialize in too many cases, first world prices charged for third world goods.

No matter how they try to obfuscate things, "free trade" as it has been practiced has beggared whole populations and weakened countries while fattening few at the very top beyond belief. Slow growth is going to translate into no growth and then negative growth very quickly as demand for everything besides food and shelter dries up in formerly wealthy countries.

Those emerging markets are not going to take up the slack. Their wages are being held below the level it would take to increase demand enough to float the system.

I don't know why these fancy economists have so consistently missed the importance of the demand side of the equation.