Inadequate adjustment assistance to industries and labour affected by export competition


In the developed countries, adjustment assistance leading to trade liberalization would involve the re-allocation of production factors from less efficient into more efficient domestic industries. Temporary deterioration in the developed country's balance of payments following trade liberalization might be expected, since, even with very efficient adjustment assistance programmes, the immediate increase in imports following trade liberalization would normally occur before personnel had been fully retrained and re-allocated into more efficient export-oriented industries. Re-allocation might be expected to cause psychological and social hardships for the affected workers, as well as possible loss of income and other employment rights. The scrapping of not fully depreciated capital equipment would involve costs for the affected firms.

Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic GrowthGOAL 10: Reduced InequalityGOAL 12: Responsible Consumption and ProductionGOAL 17: Partnerships to achieve the Goal
Problem Type:
E: Emanations of other problems
Date of last update
04.10.2020 – 22:48 CEST