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Trade and labour adjustment in Europe: What role for the European Globalization Adjustement Fund?

Author

Listed:
  • Cernat, Lucian

    (DG Trade)

  • Mustilli, Federica

    (DG Trade)

Abstract

Trade agreements have become a growing source of concerns due to potential job losses that some sectors can incur as a result of increased competition. Although the economic literature shows that the overall results of trade liberalization are positive, some sectors may be adversely affected, leading to job losses and adjustment costs. One instrument designed to deal with such adjustment costs is the European Globalization Adjustment Fund (EGF), established by the European Commission in 2006. By jointly funding with EU Member States active labour market policies, the EGF is a tool that supports workers who lost their jobs due to globalisation. Despite the relevance of the EGF as trade adjustment mechanism, the existing evidence suggests that its use is still limited compared to its potential. The paper tries to review some of the constraining factors identified in the latest mid-term evaluation by the European Commission and suggest several avenues for further improvement.

Suggested Citation

  • Cernat, Lucian & Mustilli, Federica, 2017. "Trade and labour adjustment in Europe: What role for the European Globalization Adjustement Fund?," DG TRADE Chief Economist Notes 2017-2, Directorate General for Trade, European Commission.
    • Handle: RePEc:ris:dgtcen:2017_002
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    References listed on IDEAS

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    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. Lucian, Cernat & Ana, Norman-López & Ana, Duch T-Figueras, 2014. "SMEs are more important than you think! Challenges and opportunities for EU exporting SMEs," DG TRADE Chief Economist Notes 2014-3, Directorate General for Trade, European Commission.
    3. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 2021. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 8, pages 163-234, World Scientific Publishing Co. Pte. Ltd..
    4. Lucian Cernat & Nuno Sousa, 2016. "The Trade and Jobs Nexus in Europe: How Important Are Mode 5 Services Exports?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(04), pages 65-67, January.
    5. Iñaki Arto & José Manuel Rueda-Cantuche & Antonio F. Amores & Erik Dietzenbacher & Nuno Sousa & Letizia Montinari & Anil Markandya, 2015. "EU Exports to the World: Effects on Employment and Income," JRC Research Reports JRC93237, Joint Research Centre.
    6. Beblavý, Miroslav & Maselli, Ilaria & Veselkova, Marcela, 2015. "Green, Pink & Silver? The Future of Labour in Europe, Vol. 2," CEPS Papers 10268, Centre for European Policy Studies.
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    Cited by:

    1. Juan Blyde & Jose Claudio Pires & Marisol Rodríguez Chatruc, 2023. "International trade, job training, and labor reallocation," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 204-236, February.

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    More about this item

    Keywords

    European Globalization Adjustment Fund (EGF); labour market policies; international trade;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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