Tuesday, June 14, 2005
What Does the U.S. Get From Free Trade?
All in all, they calculate the United States earns an extra $1 trillion per year because of freer trade. That's how much bigger our economy is because we lowered barriers, opened markets, and allowed goods, services and people to move across our borders in both directions.
It equals roughly 10 percent of our current gross domestic product, and it translates into an average $10,000 per year in extra income per household. Of course, any estimate of something so large and long-running is bound to be rough.
The researchers actually used four different methods and arrived at figures ranging from 7.3 percent to 13.2 percent of economic output.
So the numbers are soft, but they're all large. Any way you slice it, we've benefited substantially from opening up to trade.
Of course, some have suffered as well. Workers lost jobs, companies failed, and some towns emptied out when trade rules changed. No one can deny it.
The cost of all that isn't small either. Hufbauer and Grieco guess that the overall loss of income to those who've been hurt by freer trade could be as much as $54 billion per year.
But balance it out: $54 billion in losses vs. $1 trillion in gains.
Isn't that a trade worth taking?