Matthias Helble, research economist at ADBI, examines the impact that globalization has had on freer trade and in particular how Asia has handled the transition to trade opening.
Adjustments to Trade Opening: How to Make Globalization Inclusive and Sustainable?
Description: Matthias Helble, research economist at ADBI, examines the impact that globalization has had on freer trade and in particular how Asia has handled the transition to trade opening.
Britain’s decision to the leave the European Union, and Donald Trump’s election in the United States are clear signs of a backlash against globalization and freer trade. In many developed countries, open trade regimes are increasingly seen as benefitting only a few, while the rest lose jobs and opportunities. People feel overwhelmed by globalization. These developments have profound consequences. All ambitious mega-regional trade agreements such as the Trans-Pacific Partnership or the Trans-Atlantic Trade and Investment Partnership are put on hold.
The resistance against globalization is so far not shared in Asia. The Pew Research Center says that more than 75% of Asians believe that trade is good, that it creates jobs and boosts wages. This is the outcome of encouraging experience with globalization. Export-oriented growth strategies have allowed many Asian economies to successfully integrate into the global economy. The benefits trickled down and lifted hundreds of millions out of poverty.
But integration into the global economy has not been without costs. People lost jobs and had to move across sectors and firms. They had to upgrade their skills or acquire completely new ones. Integration also skewed income distribution, with some economies less equal than before.
At ADBI we are investigating how Asia handled the adjustment to trade opening.
First, we want to better understand how Asian economies have adjusted to trade opening, across sectors, skills, and income levels.
Second, we want to know how to ease adjustment to trade opening to ensure that most people benefit.
Our ultimate objective is to contribute to an open, prosperous, and inclusive Asia.