Bank of England governor Mark Carney said the pursuit of the "low road" of protectionism would cost jobs, growth and stability while the liberalisation of global trade in services could lead to a more inclusive system.
In an interview with Bloomberg, Mr Carney said the bank's research had shown that reducing restrictions on services trade could reduce excess global imbalances by close to one half.
Asked about Brexit, he said the bank could have a disorderly Brexit stress test within nine months.
"We can choose between a low road of protectionism focused on bilateral goods-trade balances and a high road of liberalisation of global trade in services," he said.
"The low road will cost jobs, growth, and stability. The high road can support a more inclusive and resilient globalisation."