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    D. Irwin, Free Trade Under Fire (2nd Edition) (2005), "Introduction," Pp. 1-4.

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    D. Irwin, Free Trade Under Fire (2nd Edition) (2005), "Introduction," Pp. 1-4.

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    com132
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    D. Irwin, Free Trade Under Fire (2nd Edition) (2005), “Introduction,” pp. 1-4.

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    D. Irwin, Free Trade Under Fire (2nd Edition) (2005), "Introduction," Pp. 1-4.

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    tree tale, ene ofthe gretest blessings which 9 government can ‘Confer on 2 people iin almost every county unpopular. Thomas Babington Macaulay, 1824 Introduction ‘Nearly two centre after Macaulay made &, this observation by one of Tain’ ret hiss sil rings te. Growing world ride has helped it standards oiving around the world, nd yet today, a a Macaulay's ime, free le doesnot win many popularity coves. Trade policy remains 2 highly contoversia subject, a source of neverending public debate In every county, international trde invariably beings out ans esis and secures, Wh cach passing decade, some ofthe old fers thous ade recede and new ones tke thir pie. tthe 1980s, many ‘Americans were convinced that Japan woul achieve economic dom france by wiping out indusry ater industry in the United Sttes, from sulomobis to semiconductors to supercomputers, and thereby dimi ish Americ postion i the wore Inthe 1990s, many Feared that the Not American Fee Tide Agreement (NABTA) would resin “gant sucking scund” of jabs lst to Mexico du to its low wages. Others Profese In the arecs of Sete in ate 1999 against she World Trade trade and alleged inditfer Organization (TO) Fr its promotion off ace tothe wor’ workers and envioament. Now, in the fit decade Of the «went-fstcontry, concern has sified tO China and Ind China is becoming 2 goliath in the production of mancfactred goods, ile the outsourcing of whitecolr jobs (from software programming te radiology) to India Is sparked new worsles of a "serve sector suck "naan et ue ay een pe Meio 2 ron Fears of trade exist in good times and in ba. The 19505 were a petod of robust economic gronth and the lowest U.S. unemployment in thiny yous, yet NAFTA andthe WTO generted heated debates. Economic ‘downtumsinvatibly bring out cries that foreign counties ave stealing ‘ou jobs and therefore protectionist rade policies are required. And op: ponens of Ree wade are nt confined 19 one segment ofthe political Spectrum From Patric Buchanan onthe ight to Ralph Nader on het, trade skeptics canbe found everywhere ‘ough fee trade has always been the subject of complain, the thetorcal charges aint have kepped up in recent yes, a the provcsts in Seatle and elsewhere have made cleat. A wide rine of [oops fom environments o religious oranizatons to human rights neti, have foned in marching again free wade. These groups ral gains flew ade and the WTO 354 system that serves the interests of corporations rather than people, harms workes, decimate manufactor Ing industries, sweeps aside environmental regulations and undermines ‘The litany of complains placed on the doostep of free tle 's que impressive and goes well heyend the perenial obection tha trade forces palnfal economic adjustments such 3s plant losin nd xy sof workers. Ralph Nader charges that “the Fonune 2003 GATT and [NAFTA agenda would make the alr you breathe dees and the water you rink more polluted. It would cost obs, depress vege levels and make Wwotkplces fess safe It would destroy Eanly farms and undermine con ‘ume protections." Patrick Buchanan chimes wih the ean that "bro- en homes, uprooted families, wished dreams, deinquency, vandal iam, crime-these are te hidden costs of fee ade"? The expnization PubileGizen sya that the resbife devastation being use by the im plementation ofthe WTO's ferme—and the rowing soc and political ‘ucklash this pain & generating worldwide—is the reason the WTO is ‘Why issuch host dected at re rade policies andthe World “Trade Onginization? The rapid Increase in international trad in recent decades may have unleashed 2 “sloballation backlash” In this view, ‘Sacha Ws 228 creased global integrator hus accclemted the pace of economic ‘Change and hus brought wih painful economic séhstments. Meu Mile, he reach of world trade oles hus gone beyond tide Duties to ‘Encompass internal epulaony polices regarding heath, set, und the ‘Gavironment. Asa esl, grospe disturbed by these changes, whether dk Tec in ern of ther jobs o Indirectly in tems ofthe community ab ties they behove area take, have questioned the effect of integration td the intuios sssochted wth. These groups have raed leith rate concerns shout comme an the community snd ubou whether ovecigny us sified from elected representatives at home to fuels and unaccounuble bueauens abroad Cleary, the debate over trade poly is intense and shows ile prospect of abiting. The dette has raved many fundmenta questions. ‘Why is free rade considered to be a desinble policy? Do the mast Frequerly made cricisms cf free wade, such ass adverse Impact on ‘employment and the enviorment, have meri? Do the economic ercum- tances of developing counries quay the case for fee tide in any ‘vay? What i the World Tle Organization, and do wodd wade rules ‘roile 3 county's soveregety and undermine it heslth al eniron- mental regulations “This book wins to unswer these bis questions and demystify some ofthe comple ites that suround discussions of unde policy ‘These quesons wil be eximined manly trough the lens af economics. Despite widespread popu skeicsm abou re ade, economis gen rll take a positive view ofnteational ride and believe that redoing sovernmentmposed rade bits is desirable. Inthe eyes of economist trade between counties fe mutually beneficial, fs lke the exchange of {gods within a couniey, eventhough the goods happen to cross natal boundries, While some group lose fom trade, people wound the worl re general better of with ade than they would be without Trade skeptics ofr accuse economiss of having 2 religious {ath in fee ade, of bid clinging tothe doce in the fice of con tray evidence. Bu the economic case fo re ude is based not on fath, but on logic an evidence. fs Paul Kruginan ha writen “The logs hat says thot tars and impor quotas amos always seduce real income Is ep and has survived a century and a taf f olen voli eis nesly intact. And experience teaches that goversmens tha imagine oF pretend hat their ionerverionst strategies area sophisticated Improve- trenton fee trade nearly always ture out, on elser examination, 10 be ‘engaged in largely ational poticies—or worse, a pliesthat are atonal fealy inthe sense that dey benef key interes groups atthe expense of veveryone else" ‘Sill the logic and evidence behind the case fr free trae de serves to he pt under searching Sct, as does te logic and evince Thin aesnative polices Even advorntas of fe tide ned 1 hw = srinded ofthe case, lst they simply restate sale arguments that fil co Peruade As John Star Mill argued, “even the received opinion be Favonly tue, bu the whole tit; unless sulfered o be, and aculy 1 vigorously and earnestly contested, wil, by most of those wio re vive tbe eld lathe manner of 2 prejudice, with tle comprehension or fecing of 8 rational grounds” Thus, *however tre la propostion) may be isnot fly, requend, and fearlessly discussed it wll be held asa dead dog, no ving rth "> ‘Sothe views of economists deserve critical seratny uti they dsr afar earing, Economists have studied wade fora very Tong ime tnd have noticed thatthe same worries and fears about ade tendo get peated genentin ater generation. “Wath Americ’ high stndird of Ting. we cannot succesully compete against foreign producers be ‘elute of lower foreign ways and lower cost of prodtion This lam is heard today, tue this pica quote comes from President Herbert Hoover in 1929 she urged Congres to pass hat became known asthe ‘smoot Haley trl. Such statements can be found in abundance in the rineteenth cenury as wel) Among the cams Heard yesterday and teday ace that tide wil destroy jobs and lead 10 unemployment and filing incomes, and that wade defcis wil siption away a county’ ‘wel, To economists, these ae economic allies that history and ex rerience have refuted time ad agin. As one observer qupped “ree teaders are trapped in pulle policy version ofthe movil ‘Ground, Days forced to eute the sme fallacious arguments over and over again, eside ater decade." gan 195 3. ‘sa, 169. CChaplr 1 ia tis book, “The United Sates in a New Global tconoms" st Ut basic facts about inemational trade a the US. rcromy. Wor! trade has expanded pil i ecent yeu and his = lopment provides the contest in which © consider questions of trade "Tis chupter discusses the reasons forthe increase in trade and Tre aoe of public opinion on the question of globalization, ‘Caper 2, "The Case for Free Trade: Old Theories, New Ee dence” examines the economic lie of fee wade and recent empirical ‘Souence reinforcing the cise fori Ever since Adam Smith al David ‘Ren described the gain fom tre i a sjstematie way, economists fave aessed te higher income that results rom improved resource ab Toostion a8 the main advantige of wade, But economists ave found mounting evence that tre not only helps 1 allocate existing fe Gourer propery, but also mikes those resources more productive “Teve proce gains from trade, overlooked in the stir eau tions, appear tbe substan. The welfie bene of «greater varlety cf prhts areal of ade have aso been ignored unl recenly, nd yet preliminary evidence suggests that they are quite import. ‘Chapier 3, “Protections Economic Coss, Political Bene” considers the fp side ofthe ose for Free tade—that trade interventions fare untly miguided and ofen cosy. Tris and quot on impons r=

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