The Case for Free Trade
Three recent pro-trade articles of interest. First, Peter Gordon refers to some academic surveys in support of the benefits of globalization. Second, the Washington Post argues that the Democrats’ platform is too anti-trade. Finally, Joseph Stiglitz argues that international trade negotiations are too focused on issues that are important to rich countries, which leaves issues that would benefit poor countries unaddressed.
But some subsidies, like cotton subsidies in the United States, are rightly emblematic of America’s bad faith. Eliminating this subsidy would help 10 million poor cotton farmers in sub-Saharan Africa. American taxpayers would also benefit. The only losers would be the 25,000 rich farmers who currently divvy up $3-4 billion in government handouts each year.
Developing countries also need access for the unskilled labor-intensive services in which they have a comparative advantage. These were off the agenda in earlier trade rounds, as the US pushed for liberalization of financial services – thus serving its own comparative advantage. Today, unskilled services remain largely off the agenda.
For Discussion. What other articles have you seen recently on the trade issue?