Protection racket: free trade is a key to prosperity

"Free trade is the most important single way to promote growth," Milton Friedman said in an interview a few weeks before his death. In other words: markets work, says Pete du Pont, chairman of the National Center for Policy Analysis (NCPA).

For example:

A recent Global Insights analysis concludes that Wal-Mart's 1985-2004 expansion of sales resulted in a 9.1 per cent drop in the price of food at home, a 4.2 per cent drop in the price of other goods and commodities, and a 3.1 per cent decline in consumer prices overall, saving the average working family about $2,329 per year.

And with that came a net increase of 210,000 Wal-Mart jobs in 2004 alone.

And trade agreements open market opportunities. Consider the North American Free Trade Agreement of 1993:

It has expanded total trade between the United States, Canada, and Mexico by 172 per cent.

U.S. exports to Mexico have grown by 189 per cent and to Canada by 111 per cent.

U.S. agricultural exports to Canada have doubled to $10.6 billion from $5.3 billion, and to Mexico even more – to $9.4 billion from $3.6 billion.

More than one million jobs were created in America by NAFTA.

Overall, the U.S. Trade Representative's office says, 10.4 per cent of the 2005 American GDP is the result of U.S. exports of goods and services.

The Peterson Institute says that globalisation boosts the U.S. economy $1 trillion annually, or about $10,000 per household.

Milton Friedman was right, and the protectionists are wrong. Free trade is essential to economic growth and opportunity, says du Pont.

Source: Pete du Pont, Protection Racket; Free trade is a key to prosperity. Why do Democrats fight it? OpinionJournal.com, November 22, 2006.

For text (subscription required): http://www.opinionjournal.com/columnists/pdupont/?id=110009282

For more on Trade Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=42

FMF Policy Bulletin/ 28 November 2006