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  • In Pictures: What Are the Benefits of Free Trade?

    Now that Congress has passed free trade agreements with Columbia, Panama and South Korea, it’s a good time to ask why the United States should support and expand free trade. The chart below shows that the benefits of free trade are hard to deny. Countries that have more trade freedom also enjoy stronger economies, less hunger, and better care of the environment.

    Opponents of free trade complain that it leads to “unfair” foreign competition and that it destroys jobs, but the truth is a much different story. “Countries with the highest trade barriers have nearly twice the unemployment rate of countries with the most trade freedom,” Bryan Riley and Ambassador Terry Miller explain in their new paper “Global Trade Freedom Needs A Boost.”

    Unfortunately, though, trade freedom has not expanded since 2011–and that’s all the more reason that the pending U.S. trade agreements with Colombia, Panama, and South Korea should be enacted. Miller and Riley explain how the United States can get off the sidelines and move the ball forward on free trade:

    In recent years, the United States has remained on the sidelines while other countries have aggressively moved forward with trade deals modeled on U.S. agreements, such as NAFTA. The Administration should follow up by exploring multilateral opportunities to reduce trade barriers in the Pacific, in the Western Hemisphere, across the Atlantic, and anywhere else it can find willing partners.

    Other steps the United States can take to bring about more free trade? Congress can eliminate tariffs on imported shoes and clothing, restrictions on sugar imports, job-killing anti-dumping laws, “Buy American” laws, and The Merchant Marine Act of 1920 (Jones Act) and the Passenger Vessel Services Act of 1886.

    You can read more about the benefits of free trade and how the United States can eliminate self-destructive trade barriers in Global Trade Freedom Needs A Boost at Heritage.org.

    Posted in Featured [slideshow_deploy]

    15 Responses to In Pictures: What Are the Benefits of Free Trade?

    1. Stirling says:

      Interestingly enough it's the Unions that complain about "Free Trade." Americas problem is the tax code is anti-business at 35% which results is outsourcing. Those who wish to keep jobs in America should rip the political elitte for a century of a progressive tax system.

    2. @dpinsen says:

      Thankfully, Mitt Romney isn't taking talking points on trade from the Heritage Foundation. Unrestricted free trade on our part (unreciprocated, in practice, by major trade partners such as China) has lead to yawning trade deficits, the hollowing out of our heavy industry, and the loss of millions of jobs in the US.

      • lakeite says:

        Heritage Foundation has great reviews from the people I follow. Because of my ignorance in this matter I am compelled to go with Heritage Foundation's take on CFTA. Do know, Democrats R responsible for minimum wages so high America cannot compete with anyone else in the world. Thus, loss of manufacturing jobs and unfair trade practices. America will be destroyed unless it can be stopped by friends of the Republic. Choose.

    3. Jeff, Illinois says:

      Free trade is exactly the wrong direction for america. If we were'nt a large economy and labor costs in world were more or less equal, it probably would make some sense. Yes there will be some jobs gained, but many more will ultimately be lost. Common sense says that we can't compete equally if the partner nation pays it's workers far less than we do. Ultimately, it's an incentive for large transnational corporations to send our jobs to other countries. This is exactly how america lost it's manufacturing base. But alas there's a war in this nation between our profit at any cost coporations and the american middle class workers. The GOP bought and sold will always be in favor anything that smells greater profit for their corporate masters. And because of the camouflage of a few jobs even our president is taken in. We should be open to trade wars with countries that don't care about their workers or the environment. For many many years tariffs were just the right medicine for trade imbalance, and america prospered. As long as we continue to reduce trade restrictions, america will not pull out of the recession.

      • Bill S. says:

        Forget the idea of "free trade." As long as the current regime is running our show, the only "free trade" is for those countries who are "eating our lunch." Like China. It's free for them, but not for us. We are the largeswt consumers of goods and services on this planet. Slap barriers on all of them, open "free trade" within our own boarders for our own companies, promote manufacturing, promote industry and the free enterprise system and make and sell to ourselves…then, you will see how fast the "free trade" truly becomes "free trade" for us too!

      • libertarian2011 says:

        I invite you to reject free trade at all levels–down to free trade between your household and every firm it currently trades with–and produce everything on your own. After all, wouldn't it be better if one of your family members were to be employed at a high wage and you produce everything within your own household than trade with profit-maximizing corporations like Walmart, which pays its employees the low market wage? Wouldn't it be "prosperous" to create one high paying job within each household and replace one low paying job at Walmart? For according to your own statement, you "can't compete equally if the partner [firm] pays it's [sic] workers far less than [you] do."

    4. Paulc37 says:

      Can we use the extreme to try to understand i.e. if we buy only goods from others and they do not buy anything from us how can that be good for us.

    5. LSG says:

      When a nation has a standard of living greater than a nation that a 'free trade agreement" has been proposed, the nation with the higher standard of living can only be a loser because their government facilitates companies moving their operations to the other nation and continuing to make a profit. Is not the transfer of manufacturing, and other operations, to another nation, along with jobs lost here and jobs gained there, the redistribution of wealth? Perhaps the government should concentrate on how the government can bring about conditions that would keep the operations in our country but bring the disparities of producing a product more in line with other nations rather than "free trade agreements".

    6. W. A. Pauwels says:

      Dear Heritage Editor . . . In centuries past, during periods of America’s greatest growth, importation was inhibited by large oceans, slow deliveries, high transportation costs, language differences, limited communications, national customs, government regulations, currency differences, wars, and direct tariffs (the most undesirable approach). Many of these inhibitions have declined over the decades, leaving American workers, enterprises, and the U.S. economy vulnerable to low cost foreign producers and currency manipulators.

    7. W.A. Pauwels says:

      . . . The U.S.A. should limit the GROWTH of imports (not exports) until trade balance is achieved. This could be accomplished quite simply by the government mandating a limit to the growth of purchases of foreign goods and services by American companies—based on year-over-year growth. The cost of imported goods and services exceeding the mandated limit could be disallowed as a gross profit deduction for tax calculation purposes. Year-over-year import allowances could be traded (bought and sold) in a free market. Thus businesses most in need of imports could buy additional importation rights. This proposal would encourage domestic sourcing of goods and services, and would stimulate U.S. providers, job growth, and tax revenues. And foreign suppliers would have to compete more aggressively for the more limited U.S. market available to them, thus holding down the price of foreign and domestic goods and services.

    8. Brian says:

      Another benefit of Free Trade Agreements: watching more of our manufacturing jobs head out of the country. But hey, at least companies will experience increased profits, leading to increased stock prices, leading to increased pay and benefits for their executives. Only people not benefiting from this are the low-middle class laborers. What could be better?

    9. CactusPete says:

      The graph says that the countries with the lowest freedom of trade also have the weakest economies. It would seem the best thing to do would be let those restrictive countries make the necessary adjustments in their own trade policies to better their economies. Or is that what we are trying to do? NAFTA is credited with creating a 'great sucking sound'.

    10. Carolyn says:

      We can bring back jobs for USA workers, and keep jobs that are in the USA now. How? Buy more products made by companies in the USA by American workers. Make 2011 a Made in the USA Christmas.

    11. libertarian2011 says:

      Wow! Conservatives are protectionist idiots. See Pauper Labor fallacy.

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