Free Trade
Gary Hufbauer
FREE TRADE can benefit everyone-the developed and developing world. In large part because of open markets, the global economy is experiencing its greatest half century. In fact, free trade has increased American household income by lowering costs of products, increasing wages and making more-efficient American companies. And even though open markets may come with costs, the gains of globalization exceed them five times over. So, this means when there are burdens to be borne at home, Congress can well afford to help spread the benefits as workers transition. And if done right, free trade benefits the developing world, too, helping bring states out of poverty, allowing them to bargain on equal terms with far-larger countries and potentially stemming state failure.
Yet, the Democrats have splattered their primaries with nonsense about a "time-out" from trade agreements and "opting out" of the North American Free Trade Agreement (NAFTA). As president, neither Senator Hillary Clinton (D-NY) nor Senator Barack Obama (D-IL) could indulge such foolishness. The purpose of their catchy phrases, as everyone knows, is to snare convention delegates, not make policy. But enthusiastic supporters will call their candidate to account if he or she reaches the Oval Office.
Throughout the history of the world trading system-which is to say since the end of the Second World War-the twin objectives of U.S. commercial policy have been to foster economic prosperity and promote U.S. political alliances. These objectives will not vanish when a new president enters the White House in January 2009.
