Economists are virtually unanimous that trade makes the world richer. By enabling countries to specialize, it makes workers more productive, gives consumers more choice and reduces costs.
This logic has spurred a steady decline in trade barriers since World War II. Since the 1960s, the average world tariff has declined from close to 15% to less than 7% now. In the U.S., Japan and the European Union, tariffs average below 3%. That has generated a corresponding surge in trans-border trade that has dramatically raised standards of living.
Republicans have provided most of the votes in Congress for free-trade accords in the past. Here is why: The deals cut taxes on trade. They expand individual freedom, consumer choice and opportunities for innovation. They reduce governmental barriers. They boost the private sector. They enhance the rule of law and foster civil society.
An active trade agenda also signals America’s interest in the rest of the world at a time others are worried about U.S. withdrawal. Free trade boosts development and economic reformers around the world, while supporting U.S. growth.
For much of the world, America’s commitment to stability seems more credible if built upon an economic foundation. Economic diplomacy can be the basis for hard, soft and smart power.
It is easy to be friends with people you are doing business with. It’s hard to be mad at people you do business with.
Putting tariffs on food and furniture hurts the poor the most because it raises prices on basic needs.
Jake Jabs
CEO
American Furniture Warehouse
Englewood, Colo.