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  • Free Trade Fact of the Day

    The vast majority of economists agree that further reductions in trade barriers through the Doha Round of trade negotiations would spur economic growth around the world help lift millions of people out of poverty in developing countries. Unfortunately it does not look like the current President will get much progress done on the issue before he leaves office, and if a Democrat wins the White House, all hope for American leadership on free trade will be dead. But as CATO’s Daniel Ikenson demonstrates in a new paper, countries both rich and poor can still realize gains from increased trade by reforming their trading systems.

    Called ‘trade facilitation’ these reforms include “improving the chain of administrative and physical procedures involved in the transport of goods and services across international borders.” Ikenson writes:

    Like tariff cuts, improvements in trade facilitation procedures can help reduce the cost of trade and increase its flow. A 2004 United Nations study revealed burdensome processes in developing countries, where the average customs transaction involves 20 to 30 parties and requires 40 separate documents to complete. A 2004 World bank study of 75 countries found that if “below average” performances on a compilation of four broad trade facilitation indices were able to raise their scores “halfway to the average” score for all 75 countries, world trade would increase by $377 billion, or about 9% per year.

    Posted in International [slideshow_deploy]

    2 Responses to Free Trade Fact of the Day

    1. Michael Morgan Glend says:

      It seems to me that education in the developing nations is the key to any future trade of any kind. How can we as AMERICANs continue to support nations that have such a low degree of pity for their own people. Murder ,rape ,disfigurement is something I don't believe most people hear enough about. Are we trading money ,ideology, goods,?????? We as a nation need to stand,take a position that we will not trade with any nation that does not protect its own people.

    2. Matt, IN says:

      I agree with Michael. We should not be supporting countries such as these. I'm all for free trade (and a tax system smart enough not to hurt our country because of it…Fair Tax), but our values are FAR more important than saving a dollar or two on products so we can get them from China instead of an allied country such as India, Japan, South Korea, or any of many many others.

      I already look at the country of origin for the goods I buy and avoid to the absolute best of my ability buying goods from oppressive, communist, or enemy countries. Our allies are more important to me than saving a dollar.

      Remember, where your treasure is, there too will be your heart (paraphrased from Jesus)

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