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Executive Summary The Relative Impact of Trade Liberalization on Developing Countries It has become a standard refrain in policy circles that expanded trade holds the key to prosperity for developing countries. According to this view, if the industrialized countries would eliminate their trade barriers, especially in apparel and agriculture, this would provide a basis for growth in developing countries, pulling hundreds of millions of people out of poverty. As the World Bank wrote in its …

…to capital, as a result of trade liberalization. The table includes the projections from BDS, and also the United States International Trade Commission. While these modeling exercises do not simulate the exact same polices, it is worth noting that only the World Bank finds that labor will, in general, achieve larger gains than capital in the industrialized countries. Appendix Table 1 Ratio of Gains to Labor to Gains to Capital All Labor Unskilled Labor Skilled Labor