The Basics of Tariffs And Trade Barriers
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The Magazine of Economic Justice available at http: This much is beyond dispute. Clinton administration officials estimated in the late s that expanded trade in North America had created overnew U. Employment in virtually all U. In fact, during the s, the overall U. Of course, in a large and complex economy, trade is only one of many factors that affect job creation, and its influence is difficult to isolate.
As trade expanded during the s, for example, the United States also experienced an investment boom that created jobs faster than rising imports destroyed them; overall, the number of jobs in the United States has risen by 28 million since Any free-trade booster worth her lobbying fees would argue that the boom itself resulted from liberalized trade.
Lower trade and investment barriers, the story goes, unleash entrepreneurial talents, spurring innovation and productivity gains. Old jobs lost are offset by new jobs gained, and falling wages by cheaper prices on imported goods. But the development promised by free-trade advocates never materialized. Mexican employment did grow during the early years of NAFTA, but in recent years, it has declined as mobile manufacturers have sought even cheaper labor in Asia.
Someone has to buy all this stuff. They face increasing competition from low-wage manufacturers in other poor countries, and world markets are now saturated with cheap apparel and electronics, driving prices and wages down. The result is one thing that almost everybody who studies trade now agrees upon. Whatever else they have wrought—more jobs, fewer jobs, more or less poverty—globalized trade and production coincide with greater inequality both within and between countries. The reasons for this are complex—globalization weakens unions, strengthens multinationals, and increases competition and insecurity all around—but the data are clear.
Markets do not distribute wealth equitably. Did you find this article useful? Please consider supporting our work by donating or subscribing. Free-traders claim that free trade will increase U. I would also expect to see employment increase both in our country and in our trading partners.
Has that in fact happened? Subscribe Now at a discount. Job Destruction is Widespread," www.
