Free trade fails to bring better jobs in poor nations: Study

I / Geneva October 12, 2009, 16:23 IST

Freer trade has failed to create better working conditions in the developing world, a joint study by the World Trade Organisation and UN labour agency said on Monday.

Instead it has produced new jobs mainly in the less-secure informal economy, the report found.

"Strong growth in the global economy has not, so far, led to a corresponding improvement in working conditions and living standards for many," it said.

According to the WTO and International Labour Organisation report, informal labour in developing economies accounts for 30 per cent to 90 per cent of the workforce.

"Trade has contributed to growth and development worldwide. But this has not automatically translated in an improvement in the quality of employment," said Pascal Lamy, director-general of the WTO.

"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," he added.

The growth of an informal economy also has the adverse effect of stunting the ability of a country to diversify its exports, thereby depressing overall economic growth, added the report.