BENEFITS OF FREE TRADE
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Scores of studies have shown that lowering trade barriers makes everyone better off.
- Citizens in countries that have an average tariff rate of 4 percent
or less have an average per-capita income of $17,000 compared to only about
$2,000 for those in countries where tariff rates are 20 percent or more,
according to a recent Heritage Foundation study.
- A Harvard study which examined data from developing nations over the
period 1970 to 1990 found that those with open trade policies registered
economic growth at an average rate of 4.5 percent annually -- compared
to only 1 percent among those with closed borders.
- And among developed nations, the Harvard study found GDP among those
with open policies during the same 20 year period grew an average of 2.3
percent annually -- contrasted to growth of only 0.7 percent annually among
those with restrictive policies.
- Finally, a 1993 study by the Organization for Economic Cooperation
and Development established that protectionism costs the world economy
upward of $450 billion a year.
Numerous free-trade pacts signed over the past ten years have contributed
mightily to the U.S. economy, trade experts assert.
- As recently as 1960, trade accounted for just 9 percent of U.S. gross
domestic product (GDP) -- but last year that figure had grown to 23 percent.
- In the past four years alone, exports have accounted for about one-quarter
of GDP growth.
- More than 12 million workers here owe their jobs directly to exports.
Source: Perspective, "Free-Trade Tax Cut," Investor's Business
Daily, September 18, 1997.
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