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March 22, 2005
Dispassionately Measuring the Value of Freer Trade
In this weekend’s Barron’s, Thomas Donlan writes ($) on the research of Scott Bradford, Paul Grieco, and Gary Clyde Hufbauer, on the benefits of freer trade to America. Donlan's article is an interesting summary, and intrigued me enough to track down the original research.
You can find this trio’s work, "The Payoff to America from Global Integration," (pdf) in a book edited by Fred Bergston entitled The United States and the World Economy: Foreign Economic Policy for the Next Decade
This paper begs for your attention, as it dispassionately examines the effects of trade liberalization using a variety of methodologies. Its conclusion: estimated annual gains to the U.S. economy because of loosened trade restrictions amount to about $1 trillion, no small number for a $12 trillion economy.
For the average household in 2003, the estimated gain in income attributable to freer trade policies was between $7,100 and $12,900. Even the low end of that range is no small number for an economy with over $97,000 in GDP per household in 2003.
Such research means nothing, of course, to those whose vested interests require demagoguery of this issue.
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