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?, November 22, 2006.

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    For more on Trade Issues:

    FMF Policy Bulletin/ 28 November 2006
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