With free trade under attack by just about every POTUS hopeful, it’s encouraging to note that most economists are still stalwart in their defense of the benefits of more open trade. The latest I’ve seen is from MoisÃ©s NaÃm, writing in the September/October 2007 issue of Foreign Policy. NaÃm, FP‘s editor in chief, crafts a strong argument for free trade agreements, especially multinational ones.
So, who needs free trade agreements if international trade is doing just fine without them?
We all do. Although trade may be booming, giving up on lowering the substantial trade barriers that still exist—in agriculture, in services, or in manufactured goods traded among poor countries—would be a historic mistake. Even the more pessimistic projections show that the adoption of reforms like those included in the Doha Round would yield substantial economic gains, anywhere from $50 billion to several hundred billion. Moreover, according to the World Bank, by 2015 as many as 32 million people could be lifted out of poverty if the Doha Round were successful.
He concludes with a further emphasis on the importance of trade to economic growth and its role in reducing poverty.
But perhaps what is most important to keep in mind is that, despite all the misgivings about international trade, the fact remains that countries in which the share of economic activity related to exports is rising grow 1.5 times faster than those with more stagnant exports. And though we know that economic growth alone may not be sufficient to alleviate poverty, we have also learned that without growth, all other efforts will fall short. That argument alone should be enough to make us root for the trade negotiators, and not just the trade.