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  • Chart of the Week: Major Benefits of Free Trade

    Nations that embrace international trade enjoy significantly stronger economies, achieve lower rates of hunger, and maintain a better stewardship of the environment, according to new data published by Heritage for the forthcoming Index of Economic Freedom.

    There are, of course, other factors that contribute to such positive trends. But international trade undoubtedly plays a major role in determining the success of a nation and its economy. Contrary to the claims that “unfair” foreign competition hurts the jobs at home, the unemployment rate actually fares better in times of higher trade deficits. Bryan Riley and former Ambassador Terry Miller provide further clarification:

    When the trade deficit increases, the unemployment rate decreases, and vice versa. For example, in 2009, the U.S. trade deficit shrank by 46 percent, and the unemployment rate increased by 60 percent.

    Many critics of trade deals such as NAFTA and the WTO agreement argue that free trade benefits big multinational corporations and “the rich” at the expense of everyone else. In fact, poverty rates are much lower in countries with low trade barriers than in those where trade is restricted.

    It adds up to this: Limited regulations on trade expand the economy and improve the well-being of both a nation’s citizens and its environment. With a lagging U.S. economy still bound by the recession, the expansion of trade is as important today as ever before. Trade can make everyone better off.

    Daniel Nelson is currently a member of the Young Leaders Program at The Heritage Foundation.

    Posted in International [slideshow_deploy]

    4 Responses to Chart of the Week: Major Benefits of Free Trade

    1. Pete Houston says:

      The article did not mention where the US is at. The top 1/4% I would guess.

    2. Blair Franconia, NH says:

      The protectionists, like all the members of the Democratic Party, from President Obama to Dick Durban, are against the repatriation of corporate profits. We have the highest corporate income tax in the world. Canada has
      the lowest. Ours is 35%. What's Canada's? 25%. We're 18th in economic freedom.

    3. @undefined says:

      I am doing research for a class and trying to get a better understanding of free trade among countries. From what I understand that free trading will help the economy of a poor nation or country but will it hurt other countries. From what I understand a number of the larger companies would love free trade because they could benefit from low labor costs in the other countries. That could hurt places like the USA because it would be sending jobs to other countries because of the cheap labor. Of course it would help other countries out of poverty which I do agree that it could. But I wouldn't want to lay off people from one to hire people in another country, but on a business level that would be a decision that I would have to weigh the options I guess.

    4. Guest says:

      Agree with undefined. Regarding the U.S. there is no logic or evidence to show that it has benefit the country outside of of CEO's

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