5 Dix-Carneiro, Rafael (2014) “Trade Liberalization and Labor Market Dynamics,” Econometrica, Vol 82(3), 825–  885; Dix-Carneiro, Rafael (2018) “Trade and Labor Market Adjustment: Recent evidence from Brazil,” Proceedings of the IMF Conference “Meeting Globalization’s Challenges.” 6 Dix-Carneiro, Rafael (2014) “Trade Liberalization and Labor Market Dynamics,” Econometrica, Vol 82(3), 825– 7/8  BIS central bankers' speeches  885; Dix-Carneiro, Rafael (2018) “Trade and Labor Market Adjustment: Recent evidence from Brazil,” Proceedings of the IMF Conference “Meeting Globalization’s Challenges.” 7 This negative consequence of higher trade barriers can be illustrated most starkly by the estimates of the costs  per job saved through protectionist measures. Researchers that have studied this closely estimate that the costs per job saved from protectionist measures in the United States typically run into the hundreds of thousands of dollars per year. To illustrate, consider the case of import restrictions on Chinese tires. The cost of a job saved was estimated at $ per year while the measures were in place, or more than 20 times the average worker’s compensation. Hufbauer and Lowry, “US Tire Tariffs: Saving Few Jobs at High Cost”, Peterson Institute for International Economics, April 2012. 8 The U.S. provides some assistance to workers displaced due to trade through its Trade Adjustment Assistance  (TAA) program. A recent academic paper finds that TAA-trained workers have higher cumulative earnings (after 10 years) than similar workers who didn’t receive the training.

Emerging market economies now make up a much larger share of global trade, the global economy, and global growth. As an illustration, emerging market economies have accounted for 70 percent of global economic growth since the crisis—double their share from two decades ago.3 This growth has provided much-needed support to world economic activity, as advanced economies have recovered slowly from the crisis. Rising economic integration is also evident when we examine the trade relationship between Brazil and the United States. Bilateral trade flows in goods have risen from $ billion in 1994 to nearly $ billion in 2016. The United States is Brazil’s second-largest export market, and an important destination for manufactured goods. In 2016, the stock of U.S. direct investment in Brazil was $ billion, up from $ billion in 1994.4 Recent initiatives announced by the Brazilian authorities—including a large and transparent infrastructure concession program and greater foreign participation in the oil and gas and aviation industries—underscore the potential for further increases in foreign direct investment. The Benefits of Open Trade Increased trade, through its longer-term impact on productivity, has been a key contributor to global growth and prosperity since the Second World War. Openness to trade brings many benefits to the supply side of the economy, including: larger markets, greater specialization opportunities, and the increased ability to exploit economies of scale and scope; faster transmission of technology and innovation; and greater competitive pressure on domestic firms to increase their productivity.