Top management of the World Bank, the International Monetary Fund and the World Trade Organization presented a unified front on trade in a discussion at the 2019 Spring Meetings. The leaders cautioned that overlooking the positive impact trade has on growth and poverty reduction could leave millions of people in developing countries behind.
In her remarks, World Bank CEO Kristalina Georgieva emphasized that trade-led growth can lead to dramatic reductions in poverty. She cited the example of Vietnam, where trade liberalization in the 1980s and 1990s resulted in poverty rates declining from over 60% to under 3% today. Worldwide, more open trade has helped lift over 1 billion out of poverty.
IMF Managing Director Christine Lagarde argued that trade does more than accelerate growth – it has a disproportionately positive impact on purchasing power. She noted that trade has lowered the cost of goods by 25% for high income households while for poor households the figure is more than two thirds.
WTO chief Roberto Azevedo made the case that an inclusive trade agenda means more opportunities for women and entrepreneurs. By reducing logistics costs, small and medium enterprises can take advantage of the opportunities that e-commerce can provide.
Working together, the leaders agreed that it was essential to promote trade policies that are coupled with labor policies that give workers the opportunities to transition to new jobs.