employment in this country over the long run. indeed, in recent months we have experienced the widest trade deficit in history with unemployment still close to record lows. certainly, the distribution of jobs by industry is influenced by international trade, but it is also affected by domestic trade. the relative balance of supply and demand in a competitive market economy determines the mix of employment. when exports fall or imports rise, domestic demand and relative prices have invariably adjusted in the long run to leave total employment generally unaffected. i also regret that, despite the remarkable success over a near half - century of gatt, the general agreement on trade and tariffs, and its successor, the world trade organization, in reducing trade barriers, our trade laws and negotiating practices are essentially adversarial. they presume that a trade concession extracted from us by our trading partners is to their advantage at our expense and must be countered. few economists see the world that way ; trade is not a zero sum game. if trade barriers are lowered by both parties, each clearly benefits. in almost every credible scenario, if one lowers barriers and the other does not, the country that lowered barriers unilaterally would still be better off having done so. raising barriers to achieve protectionist equality with reluctant trading partners would be neither to our benefit nor to theirs. the best of all possible worlds for competition is for both parties to lower trade barriers. the worst is for both to keep them up. for these reasons, we should welcome the opportunity to contribute to the effort of working toward further trade liberalization. if we freeze competitive progress in place, we will almost certainly slow economic growth overall and impart substantial harm to those workers who would otherwise seek more - effective longer - term job opportunities. protecting markets from new technologies has never succeeded. adjustments to newer technologies have been delayed, but only at significant cost. moreover, even should our trading partners not retaliate in the face of increased american trade barriers - an unlikely event - we would do ourselves great harm by lessening the vigor of american competitiveness. the united states has been in the forefront of the postwar opening up of international markets, much to our and the rest of the world ’ s benefit. it would be a great tragedy were that process stopped or reversed. the arguments against the global trading system that emerged first in seattle and then spread over the past year and a half arguably touched a chord in many people partly, in the judgment of many analysts, by raising the fear that they

let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but he whom heaven, earth, and sea obey by eternal laws.'all speeches are available online at www. bankofengland. co. uk / speeches second, peer pressure within firms should reinforce standards and, more generally, the commitment to real markets. most banks have codes of ethics or business principles. these are necessary but not sufficient not least because it isn ’ t reasonable to expect every trader to absorb their meaning or to translate them readily into live situations. but it is reasonable to expect them to use fmsb guidance to help recognise the differences between a real market and a rigged one. and it is essential that business cultures encourage everyone to call out market abuse when it occurs. third, buyside pressure for proper behaviour is made easier by clear, practical standards. this is formalised in the example of the fx global code, where major central banks including the bank of england, have confirmed that they intend to adhere to the principles of the code, and that they also expect the same of their regular fx counterparties. similarly, the bank of england will adhere to the uk money markets code and precious metals code and will expect the same of its market counterparties. fourth, the combination of new arrangements for compensation, the expectations of the senior managers regime ( smr ), regulation and market standards are mutually reinforcing. in the uk, a significant proportion of the variable compensation of key decision - makers must now be deferred for a period of seven years to ensure it can be clawed back over the time scales it generally takes for conduct issues to come to light. the smr gives teeth to voluntary codes by incentivising firms to develop, adopt and embed them. by requiring identification of the most senior decision - makers of banks, insurers and major investment firms, and setting requirements on them, the smr re - establishes the link between seniority and accountability, strengthens individual accountability, and reinforces collective responsibility. senior managers can now be held individually accountable if they fail to take reasonable steps ( including training or proper oversight ) to prevent or stop regulatory breaches in their areas of responsibility. the smr prescribes individual responsibilities – typically to the chair and ceo respectively – for developing and embedding a firm ’ s culture, alongside a collective responsibility for the board. and under the related certification regime, firms must also annually assess and