Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Free Trade

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Free Trade Good - Geopolitics

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Nuclear War
Free trade prevents nuclear extinction Copley News Service 1999
[December 1, 1999, lexis] For decades, many children in America and other countries went to bed fearing annihilation by nuclear war. The specter of nuclear winter freezing the life out of planet Earth seemed very real. Activists protesting the World Trade Organization's meeting in Seattle apparently have forgotten that threat. The truth is that nations join together in groups like the WTO not just to further their own prosperity, but also to forestall conflict with other nations. In a way, our planet has traded in the threat of a worldwide nuclear war for the benefit of cooperative global economics. Some Seattle protesters clearly fancy themselves to be in the mold of nuclear
disarmament or anti-Vietnam War protesters of decades past. But they're not. They're special-interest activists, whether the cause is environmental, labor or paranoia about global government. Actually, most of the demonstrators in Seattle are very much unlike yesterday's peace activists, such as Beatle John Lennon or philosopher Bertrand Russell, the father of the nuclear disarmament movement, both of whom urged people and nations to work together rather than strive against each other. These and other war protesters would probably approve of 135 WTO nations sitting down peacefully to discuss economic issues that in the past might have been settled by bullets and bombs. As long as nations are trading

peacefully, and their economies are built on exports to other countries, they have a major disincentive to wage war. That's why bringing China, a budding superpower, into the WTO is so
important. As exports to the United States and the rest of the world feed Chinese prosperity, and that prosperity increases demand for the goods we produce, the threat of hostility diminishes.

A new wave of protectionism would erupt into nuclear conflict Spicer, British House of Lords, 96
*Michael Spicer, “The Challenge from the East and the Rebirth of the West”, St Martins Press, p. 121 The choice facing the West today is much the same as that which faced the Soviet bloc after World War II: between meeting head-on the challenge of world trade with the adjustments and the benefits that it will bring, or of attempting to shut out markets that are growing and where a dynamic new pace is being set for innovative production. The problem about the second approach is not simply that it won't hold: satellite technology alone will ensure that he consumers will begin to demand those goods that the East is able to provide most cheaply. More fundamentally, it will guarantee the emergence of a fragmented world in which natural fears will be fanned and inflamed. A world divided into rigid trade blocs will

be a deeply troubled and unstable place in which suspicion and ultimately envy will possibly erupt into a major war. I do not say that the converse will necessarily be true, that in a free trading world there will be an absence of all strife. Such a proposition would manifestly be absurd . But to trade is to become interdependent, and that is a good step in the direction of world stability. With nuclear weapons at two a penny, stability will be at a premium in the years ahead.

edu/itc/journalism/stille/Politics%20Fall%202007/readings%20weeks%20 6-7/Gartzke%20War%20Peace%20Invisible%20Hand.columbia. greater flexibility and lower risk of violence for states competing under globalization affords additional opportunities to pursue competitive political objectives. rather than through military acts. Economic globalization enables a dialogue between students of world politics and political economy that is intellectually rewarding and of significant policy relevance. and the Invisible Hand: Positive Political Externalities of Economic Globalization”. States that are integrated into the global economy are more often able to reveal resolve through their statements and through the associated market responses. however. 561–586. It remains the case that states are . It is not the benefits of globalization that deter interstate violence. International Studies Quarterly 47. either implying that states should be restrained from interfering in markets or advocating barriers to markets to protect the realm of states. Integration provides for cheaper and less risky contests of words and market indicators that allow states more political flexibility. “War. chip] Students of world politics are centrally concerned with the interaction of states in a system lacking central enforcement. and to a significant degree show. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. the presence and magnitude of global assets force state leaders to demonstrate resolve in ways that were previously unavailable. Because such talk (even with its economic consequences) is often cheaper than fighting. http://www. globalization does not appear to herald a substantial loss of state autonomy. We argue. a central objective of political economy is to decipher the nature and consequence of interactions between states and markets.dialogue. As capital market integration renders conflictual talk between states more credible. Market agents are driven by economic fundamentals that encourage anticipation of state behaviors. 2003 *Erik Gartzke and Quan Li. Rather. and political transparency Gartzke and Li. expensive conflict. political demands coincide with an economic price tag and hence political talk is no longer cheap. and because the prospect of warfare is reduced. facilitating ex ante bargains and reducing the need for war. it is more often possible to resolve conflicts short of military violence. Even when poorly informed. Traditional schools of thought suggest reason for apprehension about the consequences of this interaction. states should more often pursue secondary political objectives. That global markets can hobble national economies overnight is no longer conjecture. economic agents in global markets affect bargaining among states by making threats of disruptive conflict costly for political competitors.pdf. Counter to the outcry of skeptics. While states exert less control over capital than before. the size and autonomy of global markets affects international relations. Greater market autonomy also opens up new avenues for interstate competition. that the interaction of states and markets is capable of providing positive political externalities.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade War Free trade solves war. The globalizing world economy appears increasingly to tie together states and markets in a manner liable to alter the calculus of both processes. Because markets respond to risk. Increasingly. Peace. not less. Asymmetric integration at worst softens the pacific effects of integration. Globalization allows states to reveal private information by political talk that is economically costly . States can too easily use the vulnerability of their counterparts to leverage new political concessions. In contrast.

then this informs political competitors. States become more dependent on markets but are also better able to further their international interests through market forces. ignoring market actors. Traditional perspectives concerned with relationships between politics and economics seek to protect states from markets or markets from states. Both communities have a tendency to treat the other subject as static or linear. in solidifying the empirical relationship between economic integration and peace. If states and markets genuinely interact. however. The theoretical basis for believing in informational explanations is strong. asymmetry does not add to the danger of disputes. States can continue to play power politics. Still. Another benefit of the globalization debate has been increased attention to linkages between international politics and global political economy. or whether signaling remains the most likely candidate. Nor should societies seek to isolate markets from the effects of political posturing. and we remain confident that additional research will substantiate our theoretical claims about signaling. the benign impact of globalization on peace appears to result from enhancements to economic integration. We have only made incremental progress in assessing the theory. Instead. between firms. However. . As our findings demonstrate. As Strange (1996) argues. then the interaction of states in the presence of markets is genuinely a dynamic and interactive process. then the nature of these interactions should be informative to participants. reducing uncertainty. Measures that are designed to increase the symmetry in integration are normatively desirable on several grounds. much remains to do in linking the two subjects. they now do so at a price. structural changes in the world economy affect the nature of diplomacy from solely among states to that between states. our results suggest no such trade-offs. Much remains. but often benign. allowing for ex ante bargains and some increase in international peace. observers. The emergence of greater economic autonomy means that market actors can shift wealth with greater ease. The rise of autonomous markets implies a different game of politics with a more complex set of actors. If our conception of globalization and peace is valid. we fail to demonstrate that integration causes the reduction in dispute behavior. More fine-grained analysis using events data and market indicators will be necessary to ascertain whether an alternative precipitant can be found for the relationship we identify. While our study shows that states that share valuable. We see the externalities of state-market interactions as mixed. ironically increasing the sensitivity of markets to political behavior. even if occasionally these efforts result in additional asymmetry. Students of world politics are typically more concerned with stateto-state relations. If some economic inefficiency is induced by interstate conflict. If asymmetric integration does not significantly increase the probability of conflict. However. and between states and firms. too. While the conventional wisdom implies that there is an inherent trade-off between efficient economic policies and efforts to promote peace. The United States and other major powers can best discourage conflict by promoting greater global economic ties and by fostering equity of development. Political economists are concerned mainly with the relationship between state and market. then at least one rationale for protecting states from markets is removed.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade asymmetrically integrated into the world economy. asymmetrically integrated dyads are asymmetrically able to signal. and researchers. autonomous capital linkages are less likely to fight.

However. Yet these studies fail to explain how multiple channels alter states’ incentives to compete. conception of war onset from signaling theory. Kroll. One insight from this literature is that a diversity of linkages may itself be a palliative for violence. The study uses capital and monetary policy variables to show that interdependent states are less likely to fight. “War.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20weeks%20 6-7/Gartzke%20War%20Peace%20Invisible%20Hand. being a transaction between nations. 1999). The fundamental claim of this literature is that economic linkages deter conflict by increasing opportunity costs. First. Most quantitative studies report that bilateral trade correlates with a reduction in inter-state militarized disputes (Polachek. Rosenau. Caporaso. and Boehmer (2001) offer a game-theoretic model and quantitative test of Morrow’s second point. ‘‘International commerce. While this may not be a fatal weakness for research narrowly focused on political processes. 1999b. students of political economy began to re-evaluate the effect of economic interdependence on inter-state conflict. Second. allowing states to inform competitors about relative resolve and removing informational motives for war. 1999a. Oneal et al.. thereby ignoring interactions between states and markets. the forgone benefits states face in using force.8 Trade and war are endogenous. Keohane and Nye. 1984. and economic interdependency all check conflict escalation Gartzke and Li. States may subsume opportunity costs associated with trade as different bargains. Polachek. 1978. Research on interdependence and conflict is methodologically sophisticated and offers important statistical support for the intuition that inter-state economic linkages promote peace.7 Using a bargaining logic of war. Peace. To this we add the state–market relationships emphasized by globalization research and adopt a specific. 561–586. Morrow offers two reasons why trade and conflict do not interact in the manner typically described (1999). 1980. International Studies Quarterly 47. explicit. 1993. Bliss and Russett. states are not deterred from conflict if the threat of conflict deters trade. 1989. 2003 *Erik Gartzke and Quan Li.political signaling. and Tabaras. and Chang. Free trade prevents conflicts – allows transparency and bluffing strategies . and the Invisible Hand: Positive Political Externalities of Economic Globalization”. 1997). chip] Beginning in the 1970s. studies of interdependence typically emphasize states to the exclusion of actors in the private sector. 1997. interdependence also facilitates costly signaling. trade should be reduced ex ante where the risk of conflict is greatest if firms anticipate contests between states (Morrow. transparency. However. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. Oneal and Russett. so that interdependence does not necessarily reduce the likelihood of disputes. We take from the interdependence literature our research design and the general expectation that integration encourages peace. 1999). Gasiorowski.columbia. Siverson. http://www.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Trade deters conflict. 1996. trade should at most weakly deter conflict since factors inhibiting aggression by one party encourage aggression in others. 1986. 1998. it is also plausible that the rise of markets relative to states makes unbiased descriptions of political conflict in isolation from non-state actors impossible. Robst.pdf. The literature has also been imprecise in its treatment of the causes of war. Several authors made conceptual contributions or refined definitions of interdependence (Deutsch. Gartzke Li. could conceivably also have a direct impact on the likelihood of peace and war: once again the *economic+ interests might overcome the passions. specifically the passion for conquest’’ (Hirschman. 1998).

1994). The signaling literature explores two mechanisms likely to enhance the credibility of political statements.12 Alliances offer another possible example of costly signaling. 561–586. Audience cost models involve sanctions for observed bluffing (as when a leader backs down from a threat). to remain silent. 1999). or high costs for fighting. Costly signaling offers a second process by which leaders can increase their credibility . 1998. Competitors who are aware that some leaders face harsher consequences for deception are more likely to believe statements from these leaders. disapproval of bluffing by an audience or ‘‘selectorate’’ encourages leaders to be more truthful (Fearon. or interest. A state that claims it is willing to intervene in the event of a war between states and redeploys two aircraft carriers. 1998). is more credible than a state that issues only a verbal warning. States enhance the credibility of deterrent threats by associating costly behavior with the threat.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Gartzke and Li. competitors face incentives to conceal weakness and claim strength. http://www. Alternately. 2000). 1998. but credibility can also be increased if some price is imposed regardless of subsequent actions. Peace. Sartori (2002) shows how states can internalize the consequences of bluffing through reputation. oppositional elites may sanction bluffing (Schultz. The inability to communicate credibly. say.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20w eeks%206-7/Gartzke%20War%20Peace%20Invisible%20Hand. Credibility is again a problem. or to choose more pliant language.11 Making a leader’s words costly encourages leaders with relatively low valuations for issues at stake.pdf. Leaders engage in threats that imply a cost to potential attackers. states or leaders caught in a lie are less likely to be believed in future negotiations.columbia. They often impose ex ante costs that differentiate a resolved defender willing to . threat. Smith. and the Invisible Hand: Positive Political Externalities of Economic Globalization”. 1990). Morrow.9 Given that agreements often depend on perceptions of relative power. 1999. “War. Alliances also seek to alter inter-state behavior by manipulating beliefs (Fearon. chip] A ubiquitous characteristic of competition is the difficulty actors face in credibly communicating private information about factors salient to their performance in a contest. In societies where office-holding is subject to popular review. Competition and the private nature of information about factors relevant to a state’s performance in a contest mean that states have difficulty conveying relevant facts in a credible manner. forms the basis of an evolving literature on signaling in international relations. This ‘‘pooling’’ of attributes. In a related conception. since leaders have incentives to make deterrent threats regardless of whether they expect to act to fulfill their commitments (Powell. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. First. leaders address the credibility problems associated with cheap talk. 2003 *Erik Gartzke and Quan Li. Domestic audiences or opposition groups can punish leaders who are found to be dissembling (Fearon. By making talk costly. so-called cheap talk signaling enhances credibility by differentially rewarding honesty or punishing bluffing.10 States with sanctioning selectorates are then able to communicate credibly using words and less often need to resort to costly deeds. International Studies Quarterly 47. Observers may then infer from differences in statements and from associated (observable) costs which leaders are resolved and which are not. Deterrence theory argues that states can manipulate the probability of contests by altering the perceptions of potential attackers. Contests are then less often necessary as states arrive at nonviolent ex ante bargains. The talk of nations is too often cheap. 1994. and its relationship to costly contests. or ‘‘types’’ means that opponents sometimes underestimate one another. Like the boy who cries wolf. Schultz. 1997. Applications of costly signaling theory appear in several subjects in international relations.

States learn about an opponent through the conduct of a war. interdependence. 2000). however. How do increasingly autonomous global capital markets influence the conduct of world affairs?1 We use signaling theory to argue that integration can reduce reliance on military force as a method for states to pursue national interests. previous studies on globalization. Studies of globalization also appear to cherish a negative conception of the political consequences of integration. How third parties are said to influence credibility. Systemlevel or case study research on globalization assesses the scope of integration or debates the relative merits of efficiency versus equity. while they must be costly to be informative. war itself involves costly signaling (Wagner.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade protect a partner from states possessing only weak. since sanctions are imposed regardless of subsequent behavior. We next synthesize and extend elements of these three literatures to show how state exposure to global capital markets can produce more peaceful political interactions. research on interdependence embraces dyadic analysis and offers a more optimistic conception of the political externalities of trade. are bound to carry the most credence with observers. and the Invisible Hand: Positive Political Externalities of Economic Globalization”. deterrence. Globalization creates disincentives for conflict Gartzke and Li. is relevant to what must be known. informal alignments. In summary. with their own incentives to respond strategically to situations.pdf. In contrast. ignoring other aspects of integration. eventually learning enough to bargain effectively. of course. http://www. while also leaving key issues in doubt.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20w eeks%206-7/Gartzke%20War%20Peace%20Invisible%20Hand. do not require human casualties to unravel the problem of cheap talk. Costly signaling theory can be applied to other contexts in international relations besides war. and inter-state conflict offer insights that help us understand how globalization influences political competition. “War. Put . unlike deterrence and alliance formation. Finally.13 Finally.columbia. but emphasize audience costs over other forms of costly signaling. Indeed. Yet the interdependence literature is narrowly attached to goods markets. International Studies Quarterly 47. chip] Recent years have witnessed growing interest among scholars and policymakers in the political consequences of economic integration. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. Costly signaling requires only that third parties respond egoistically to changes in conditions brought about by political shocks. 561–586. Signaling theories have yet to be applied to account for how a third party such as the global capital markets affects inter-state competition. In this sense. Interdependence research also focuses on states as the predominant international actors. we seek mechanisms that. Peace. 2003 *Erik Gartzke and Quan Li. states and leaders do not signal so much as signaling occurs to them. In our analysis. the most effective signaling is likely to follow from mechanisms that are not under the control of the participants. Any process that makes a leader’s statements expensive ex ante reduces incentives to bluff. signaling theories offer a coherent rationale for war and peace. and how observers must act. In cheap talk signaling. Third parties. audiences must be informed and attentive to leader behavior in order to sanction bluffing and generate credibility. is that it involves violence and bloodshed. The problem with war. The sanctioning entity must distinguish between bluffers and non-bluffers in order to encourage honesty. Little attention has been paid to either dyadic interstate conflict or the theoretical logic of war. and alliances.

concerns about unequal development appear overstated.’’ Leaders facing uncertainty and international competition have incentives to bluff. Early students of capital like Montesquieu (1989 [1748]) and Smith (1976) anticipated that markets that span borders would have pacific effects. Lenin (1970[1916]) to Patrick Buchanan (1998) argue that globalization generates not amity. but added international antagonism. Under traditional international conditions. and since some settlement (tacit or overt) eventuates. War then acts as a mechanism of revelation. occasionally necessitating costly contests to unravel relative capabilities or resolve. The idea that the global economy impacts the disputatiousness of states is certainly not new. then globalization presents politicians with a dilemma. there exists a mutual benefit for states in obtaining eventual settlements in lieu of fighting. and the plundering of state sovereignty on issues as diverse as labor rights. the environment. but asymmetry should not by itself make integrated states more disputatious than states with limited exposure to global markets. but short of military violence. Globalization provides an additional mechanism for competition beyond cheap talk. Critics of free markets from V. Domestic audiences or opposition groups can make a leader’s statements more credible ex ante by punishing bluffing ex post. informing competitors about relative power or resolve and thereby dissipating the impetus to fight. Asymmetric integration may precipitate civil tensions. there exists another mechanism to enhance credibility. Here. Since military contests are costly. Resolved leaders pursue demands in spite of the economic consequences.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade simply. Previous research based on this insight emphasizes the role of domestic audience costs (Fearon. then processes that inform states without requiring military violence promote peace. Optimism does not necessitate irrationality. States can prefer war if they differ in their expectations about the terms of eventual settlements. Demonstrators from Seattle to Switzerland and from Gothenberg to Jakarta have taken to the streets. States need only be confronted with private information and incentives to compete (Fearon. 1999) in corralling ‘‘cheap talk. If in turn leaders have incentives to sooth economic markets. Leaders are forced to choose between stable markets and the pursuit of political objectives. mobilized by apocalyptic visions of the menace of globalization. globalization promotes peace. however. Adam Smith identified in markets autonomous forces with serendipitous effects. Contemporary partisans continue the dialectic in various forms and through various methods. Yet.2 At the same time. Unresolved leaders may prefer to abandon political objectives rather than antagonize investors. Developments in the bargaining theory of war suggest that informational asymmetry (uncertainty) is an important cause of interstate violence. Leaders must sometimes go to war to prove their willingness to do so. conflict. If at least some disputes result from uncertainty. 1995). at least in the realm of nonviolent competition. Global markets have the ability to punish leaders’ statements by reallocating capital abroad. we discuss how globalization facilitates costly signaling among states. Leaders of integrated states who threaten a neighbor encourage investors to flee. potentially allowing states to bargain short of war. Making talk costly ex ante also discourages bluffing. I.4 In the sections that follow. at least one party must be overly optimistic about its prospects in a contest. and military power. Proponents of integration appear to see the rigorously derived implications of efficient markets as sufficient justification while critics of disparate partisan persuasion predict increased inequality. We differ from existing debates about globalization and economic interdependence in how we characterize the causes of war and in the way we link political conflict to markets. differentiating themselves from less resolved types and allowing opponents to more effectively fashion mutually acceptable ex ante bargains. 1994) or opposition groups (Schultz. we first review the relevant literature. states possess only crude instruments such as cheap talk and force with which to compete. . 1998. All factions seem to overlook the possibility that integration introduces even greater leverage and flexibility for states.

561–586. chip] Informational theories of war argue that at least some contests result from uncertainty and states’ incentives to compete. 2003 *Erik Gartzke and Quan Li. As crises heat up and leaders continue to advance political objectives. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. and the Invisible Hand: Positive Political Externalities of Economic Globalization”. and because economic benefits are readily observable. The ability of capital to flow freely into and out of a national economy provides leaders vying for prosperity with incentives to appeal to the market. investors possess unambiguous incentives. the (subjective) valuation of political goals is not. First. The fact that global integration allows investors to shift capital abroad with greater rapidity and ease means that economic consequences can be both massive and swift. Peace. The leader of a globalized state thus faces a trade-off between economic and political incentives. making it difficult for integrated states to avoid the economic consequences of political competition. the proximity of danger should lead markets to assess the extent and credibility of looming political shocks. . globalization significantly increases the ability of market agents to respond decisively to political risk. Further. Globalization creates transparency – leads to fewer crisis miscalculations Gartzke and Li.pdf. International Studies Quarterly 47. When capital is free to move globally. Second. and deter future investments. the conflictual political talk of leaders is no longer cheap. Traditionally. “War. the ability of other actors to observe both these costs and a leader’s reactions is informative. opponents can better infer the concealed (subjective) valuation for political objectives. The fervor with which leaders make political threats now imparts an economic cost. For a state with a closed economy seeking to compete in the international system. While opportunity costs seldom deter contests directly. for a state that is integrated into the global economy. Costly signaling can reduce the need for conflict by allowing for credible communication. While economic costs are readily quantifiable. Efforts to promote prosperity and economic stability imply a lack of political resolve while efforts to compete abroad frighten markets. Globalization has three attributes that facilitate costly signaling short of war. Globalization facilitates costly signaling by making leaders’ talk costly and thus reducing the incentives to bluff.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade We then develop our argument and assess some of our claims using large-sample quantitative tests.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20w eeks%206-7/Gartzke%20War%20Peace%20Invisible%20Hand. raise the costs of borrowing. Leaders that value economic conditions more than a given political issue will prefer to accept less generous bargains while leaders that value the issues at stake highly and pursue more advantageous political bargains can demonstrate preference intensity through a willingness to incur economic hardship.columbia. http://www. We conclude with a discussion of some of the implications of our theory and the prospects for globalization and peace. Leaders’ private information about their valuation of the stakes in international political competition leads to uncertainty and the possibility of violent contests. leaders have been forced to fight to prove that they are not bluffing. Because globalization forces leaders to choose between economics and politics. there exists a ‘‘middle path’’ between fighting and just talk. However. These assets impose additional opportunity costs on states for conflictual political activity. global markets consist of assets that are easily quantified. alternatives are largely limited to cheap talk and war. Conditions that frighten investors lead to capital flight.

at least some leaders who are bluffing prefer to reveal their bluff rather than continue to compete. Moderation. Trade creates disincentives for posturing. as has occurred in the recent crisis between India and Pakistan. To the extent that globalization limits the ability of states to interfere with market processes. can alter the prosperity of nations. Yet the costs associated with political shocks do not in themselves do much to deter contests. Instead. War is appealing because it serves the dual role of signaling while potentially increasing a state’s bargaining power. Alternately. as well as the difficulty in bluffing simultaneously in opposite directions. A leader seeking to obtain concessions from a neighboring state. the leader might reassure investors that he or she has no intention of resorting to force. The size of global capital markets makes their operation relevant to states. Because an economic cost is associated with frightened investors. and cannot immediately weaken a state’s military strength.17 Third. and arms racing all involve changes in the military balance that can be seen as threats. as well as the incentives investors have to pursue their own economic interests. Few states will prefer costly methods of identifying resolve that also weaken their bargaining power. 1997). does not alter state borders. Finally. Integrated states face the prospect of mutual economic harm as the result of threats or demands. Large outflows of capital. leads to crisis management . The difference in state goals in economic and political spheres means that one cannot typically comfort investors and frighten political opponents at the same time. Frightening a political opponent necessitates spooking investors as well. This tension between political and economic objectives. alliance formation. Market integration therefore creates a tension for leaders between economic incentives to cooperate and political incentives to compete. costly signaling through deterrence. global markets are more likely to influence conflict through the revelation of information. only stabilizes markets by betraying the leader’s efforts to bargain aggressively with competing states. The target of a threat in turn has an incentive to accommodate the demand in order to stem capital outflows. Thus. but this is likely to encourage investors to flee abroad or charge a higher risk premium. Symmetry implies that factors that inhibit one state in a conflict encourage additional aggression from others. however. scaring markets involves no direct loss of life. and possibly touch off a conflict spiral (Kydd. an outcome not recognized in previous literatures. for example. allowing investors to hedge against or flee the hazards that shadow political contests. The leader making a threat reveals resolve because of the harm she imposes on her economy. it also forces states to confront the trade-off between satisfying markets by promoting political stability and satisfying political interests by pursuing competitive international goals. signaling through markets is costly but nonviolent. Integrated markets are characterized by the ability of capital to more freely across borders. forces the leader to choose between stable markets and political competition. Costly market responses offer a mechanism for signaling while imposing a cost on an opponent. could threaten war. means that frightening markets pose both costs and opportunities for political leaders. we see the autonomy of capital as a critical component of our argument.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Increasing globalization means that market actors can react relatively autonomously to changes in risk and return. States participating in the global economy face added opportunity costs in pursuing conflict abroad. In contrast. This ability to significantly harm states. Different priorities between states are then revealed by the interaction of states and integrated markets.

Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University. 2003 *Erik Gartzke and Quan Li. The economic consequences of conflict rise as automatons that flee risk grow as a portion of market capitalization. distinguish between genuine threats and bluffing. If a leader remains committed to pursuing a given political objective. requiring only that states and markets learn about each other by observation without demanding any prior knowledge or forward-looking strategy. and act in a manner informing political competition. 1998 .Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Gartzke and Li.columbia.pdf. First. The market share of responsive economic automatons will increase with successive political crises. If markets anticipate that a leader is bluffing. These same incentives ensure that integrated markets will evolve to punish political adventurism.18 Second. Political selection also encourages leaders to weigh market incentives against foreign policy goals. If instead the leader regrets the economic damage caused by hostile words. Thus. only one need actually occur. Over time. the leader can retract his statement. while automatons that ignore politics will tend to see their holdings dwindle. by distinguishing leaders who are resolved from those who are not. thereby informing markets and other states of the leader’s resolve. automaton investors will be differentially affected if some automatons attend to political shocks while others do not. Leaders who know that markets fear political conflict must expect economic damage. and the Invisible Hand: Positive Political Externalities of Economic Globalization”. “War. and prefers to re-stabilize domestic markets. two or more can combine in a given crisis. Conversely. then markets have incentives to re-allocate capital or charge a higher risk premium. If investors in turn are aware that political shocks carry added economic risk (markets can be totally ignorant about the leader’s intentions). Finally.19 This interaction of state and market is sufficient to allow observers and participants to infer meaning from a leader’s talk. Leaders who are not cognizant initially that hostile political statements upset markets need only be able to assimilate the consequences of their actions in order to develop this understanding. This second conception may be a reasonable way to characterize how globalization affects inter-state communication. 561–586. leaders who anticipate negative economic consequences of hostile political words are aware that their talk is no longer cheap. While each alternative is logically possible. The fact that markets fail to respond to a leader’s threats.20 Free trade removes incentives for war. however. even if neither states nor markets learn. markets might anticipate looming contests. the director of the Center for Trade Policy Studies at the Cato Institute. The third possibility is minimally restrictive. leaders may anticipate the market response to political shocks. again revealing information (in this case a lack of resolve). Griswold.goods can be obtained peacefully Daniel T. Automatons that re-allocate capital to adjust for shifting political conditions will tend to see their holdings grow. political and economic selection will tend to evolve actors that are mutually responsive. stands as an indication to other states that the leader is probably bluffing. International Studies Quarterly 47. but one can relax assumptions even further. http://www. then he can persist in his demand. Bluffing is less frequent as the cost involved in scaring markets deters leaders from idle threats. Peace.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20w eeks%206-7/Gartzke%20War%20Peace%20Invisible%20Hand. chip] Globalization can facilitate costly signaling in crises and reduce the need for violence in four ways. then they have no incentive to alter behavior or forgo profitable market opportunities.

cato. war not only means the destruction of life and property. Great Britain and Argentina were members of GATT when they fought over the Falklands in 1982. but they were also both committed to protection as a trade policy. To a nation committed to free trade. In contrast. Saddam Hussein. The fourth-century writer Libanius declared in his Orations (III). “Peace On Earth. but Argentina. no matter where produced. http://www. that all men might be able to have common enjoyment of the fruits of the earth. A growing web of international investment has also strengthened peace among nations. As the 19th century Frenchman Frederic Bastiat said. International trade creates a network of human contacts. But . free trade does not guarantee peace. none of the direct participants were what could be described as open economies at the time of conflict. chip] Advocates of free trade have long argued that its benefits are not merely economic. at least one side was dominated by a nation or nations that did not pursue a policy of free trade. to the end that men might cultivate a social relationship because one would have need of the help of another. And so He called commerce into being. “When goods cannot cross borders. bringing us a step closer to the promise of peace on earth recorded 2. investment and human migration. Of course. expounding what we now call the Universal Economy Doctrine. just as protectionism does not guarantee war. no wars have been fought between two nations that were outwardly oriented in their trade policies. Cato. Free Trade For Men”. understood the link between trade and international harmony. By promoting communication across borders. can overwhelm the beneficial influence of peaceful commerce. emails. the rise of protectionism and the downward spiral of global trade in the 1930s aggravated the underlying hostilities that propelled Germany and Japan to make war on their neighbors. trade increases understanding and reduces suspicion toward people in other countries. Free trade makes it more profitable for people of one nation to produce goods and services for people of another nation than to conquer them. the instigator of the 1991 Persian Gulf War. In the recurring Middle East wars between Israel and its Arab neighbors. the aggressor in that conflict. a nation’s citizens can gain access to goods and resources outside their borders by offering in exchange what they themselves can produce relatively well. India and Pakistan were both members of GATT during their 1965 and 1971 conflicts. Free Free Trade trade raises the cost of war by making nations more economically interdependent.” Open trade makes war a les s appealing option for governments by raising its costs. “God did not bestow all products upon all parts of the earth. dating back to 1948-49. New York Times columnist Thomas Friedman has pointed out what he calls the Big Mac thesis: that no two nations with McDonald’s franchises have ever gone to war.000 years ago. Griswold. The century of relative world peace from 1815 to 1914 was marked by a dramatic expansion of international trade. illuminated by the example of Great Britain. was at the time still under the protectionist spell of Peronism. racism and intellectual hubris. This human interaction encourages tolerance and respect between people of different cultures (if not toward protectionist politicians).” In the more than half a century since the end of World War II. but distributed His gifts over different regions. After the nightmare of two world wars. the only way to gain access is through military conquest. For example. When the door to trade is open. When the door is closed. Enduring human vices such as greed. “ New York Times columnist Thomas Friedman has pointed out what he calls the Big Mac thesis: that no two nations with McDonald’s franchises have ever gone to war. envy. It is also terrible for business. the United States encouraged the nations of Western Europe to form a free-trade area not only to promote economic development but also to reduce international rivalries. Free trade also encourages people and nations to live in peace with one another. Decades of trade liberalization have helped to make war among members of the European Union virtually unthinkable today or in the foreseeable future. Phone calls. could be described in many ways. but only when at least one of the warring sides was protectionist in its trade policies. In every one of the two dozen or so wars between nations fought since 1945. armies will.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker *Daniel T. with the Arab countries enforcing a virtual boycott of trade with Israel. disrupting international commerce and inflicting even greater hardship on the mass of citizens. government.” History demonstrates the peaceful influence of trade. combined with the power of free trade among nations does make war less likely. A nation open enough and developed enough to be a profitable home for an established international franchise such as McDonald’s will generally find war an unattractive foreign policy option. Ancient writers. faxes and face-to-face meetings are an integral part of commercial relations between people of different nations. but not as a free trader.org/publications/commentary/peace-earth-free-trade-men. 12/13/1998. Wars have been fought between members of the General Agreement on Tariffs and Trade.

foreign investment. chip] First. Those are assets that cannot be seized by armies. and human capital. With trade comes more travel. and more exposure to new ideas.” Much of the political violence that remains in the world today is concentrated in the Middle East and Sub -Saharan Africa — the two regions of the world that are the least integrated into the global economy. Japan. poor and isolated North Korea is all the more dangerous because it has nothing to lose economically should it provoke a war. this is particularly true in Latin America Daniel T. Griswold. setting tariff levels had been a matter of domestic economic policy. Thanks in part to globalization. financial assets. but also ruptured trade and investment ties that impose lasting damage on the economy. War in a globalized world not only means human casualties and bigger government. trade liberalization has served as the handmaiden of an internationalist foreign policy. when. globalization allows nations to acquire wealth through production and trade rather than conquest of territory and resources. the extensive and growing economic ties among Mainland China. Out of the ashes of that experience. In large part because of their intertwined economies. the dying out of interstate conflicts and a reduction in intra-state conflicts. Increasingly. now it became the subject of international negotiations. For over six decades. and other Western European nations to form a common market that has become the European Union.cato. say oil or timber or farm products. Second. Efforts to bring peace to those regions must include lowering their high barriers to trade. culminating in the Central American Free Trade Agreement with the United States. “Peace on Earth? Try Free Trade among Men”. countries that were racked by guerrilla wars and death squads two decades ago have turned not only to democracy but to expanding trade. Advocates of free trade and globalization have long argued that trade expansion means more efficiency. In East Asia. the introduction of a more open economic model in most states of the Latin American and Caribbean region has been accompanied by the growth of new regional structures. in the aftermath of the disastrous Smoot-Hawley tariff. more contact with people in other countries. the director of the Center for Trade Policy Studies at the Cato Institute. globalization has dramatically raised the economic cost of war.org/publications/commentary/peace-earth-try-free-trade-among-men. they saw open markets as a way of promoting peaceful relations in an increasingly hostile world.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Globalization decreases war. http://www. If people need resources outside their national borders. and Taiwan is helping to keep the peace. South Korea. In short. and domestic entrepreneurship. As the Stockholm institute reports in its 2005 Yearbook. and the Internet. 12/28/2005. higher incomes. the United States urged Germany. But deep trade and investment ties among nations make war less attractive. they can acquire them peacefully by trading away what they can produce best at home. Cato. Previously. those nations have more to lose should war break out. France. almost two thirds of the world’s countries today are democracies — a record high. After World War II. Freedom to trade nurtures democracy by expanding the middle class in globalizing countries and equipping people with tools of communication such as cell phones. 2005 *Daniel T. a general war in Europe is now unthinkable. their aims were primarily diplomatic. FDR’s secretary of state Cordell Hull masterminded and pushed through the Reciprocal Trade Agreements Act of 1934. and reduced poverty. free trade was integrated into the larger strategy of containing Soviet . Trade wars in the 1930s deepened the economic depression. The welcome decline of armed conflicts in the past few decades indicates that free trade also comes with its own peace dividend. as national economies become more integrated with each other. “Since the 1980s. This association goes back to the New Deal. trade and globalization have reinforced the trend toward democracy. In contrast. Of course. wealth is measured in terms of intellectual property. Hot-blooded nationalism and ideological fervor can overwhelm cold economic calculations. Third. Griswold. free trade and globalization do not guarantee peace. and democracies don’t pick fights with each other. and helped to usher in a world war. In Central America. In the international arena. China’s Communist rulers may yet decide to go to war over its “renegade province. satellite TV.” but the economic cost to their economy would be staggering and could provoke a backlash among Chinese citizens. Hull and the other New Dealers who pulled off this transformation did so not out of love for free markets generally. exacerbated global tensions.

we hoped to prevent defections to the Soviet camp. trade agreements fortified the solidarity of the Western alliance. By increasing our commercial ties with Europe and Japan.S. mixed in with grousing about know-nothing members of Congress who don’t even have passports.” Fast track in particular tends to get lumped together with calls for additional IMF funding and paying back UN dues.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade communism. support for trade liberalization continues to be sold as an obligation of American “international leadership. The Cold War is over. . And by opening our markets to Third World countries. but U.

and eventual democratization. the nationalsecurity dimension of trade policy is once again plainly visible. Trade barriers in the United . will not guarantee economic revitalization. It’s true that scrapping protectionist policies. Exposing the economy to foreign competition and capital acts as a catalyst for more systemic reforms.” since “a vital expanding economy in the free world is a strong counter to the threat of the world Communist movement. “We therefore must resist the temptation to accept remedies that deny American producers and consumers access to world markets and destroy the prosperity of our friends in the non-Communist world. under the circumstances.org/publications/commentary/free-trade-fast-track-national-security. meanwhile. we in the West can do more to facilitate Muslim countries’ participation in global commerce.” President Kennedy was no less forceful in linking free trade and national security. a new bipartisan consensus emerged in favor of international collaboration to reduce trade barriers. Strengthening commercial ties with our allies would serve to maintain Western solidarity.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Terror Free trade solves terrorism by removing economic and politically instability Lindsey.” Kennedy put those words into action with his 1962 Trade Expansion Act. He praised the legislation as “an important new weapon to advance the cause of freedom. director of the Cato Institute’s Center for Trade Policy Studies. http://www.” Protectionism. Mexico. “*A+ll problems of local industry pale into insignificance in relation to the world crisis. Those failures breed the despair on which violent Islamist extremism feeds. Supporters of market-opening trade agreements saw them as a vital adjunct in the larger struggle against communism. For most of America’s history. 2001 [Brink. such far-flung examples as Chile. In the shadow of the Soviet challenge. and exports other than oil remain puny. by itself. an important front in the war against terrorism will have been abandoned. President Eisenhower played a pivotal role in bringing historically protectionist Republicans into the new free-trade coalition. Market opening in the Muslim world is desperately needed. chip] During the Cold War. and South Korea demonstrate the interconnectedness of globalization. trade policy can once again serve the higher cause of national security. He was emphatic that parochial anti-import interests must give way to the overwhelming national interest in an open and prosperous international economy. Taiwan. Meanwhile. “Free Trade. It is now painfully clear that Americans live in a dangerous world — and that the primary danger at present emanates from the economic and political failures of the Muslim world. no comprehensive campaign against terrorism can leave them unaddressed. In the new era that commenced on September 11. amounted to “shortsightedness bordering upon tragic stupidity. But the fact is that integration into the larger world economy has been central to every developingcountry success story of recent times. opening our markets to developing countries would help to keep them out of the Soviet orbit.” he declared. Trade and investment barriers are pervasive.” In the wake of September 11. It was vital that the trading system allow “backward people to make a decent living … *or else+ in the long run we must fall prey to the communistic attack. however. economic dynamism. 12/6/2001.cato. Fast Track and National Security”. And over the longer term. If it fails. “*W]orld trade is more than ever essential to world peace. American trade policy pursued aims that transcended merely commercial considerations.” stated the 1960 Democratic Party platform. the “tariff question” fell within the realm of domestic policy — and in that realm. Cato. domestic protectionist interests generally carried the day. which made possible the breakthrough “Kennedy Round” of world trade talks.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

States and Europe remain formidable for precisely those products that poorer countries are best able to export — namely, food and textiles. Consider the case of Pakistan, a strategic linchpin in the war on terrorism. Some 60 percent of the country’s industrial work force is employed in the textiles sector, yet further growth is hampered by import quotas and high tariffs that block access to rich-country markets. Unfortunately, the same shortsightedness condemned by President Eisenhower a half-century ago is hampering trade policy’s usefulness today as a weapon against terrorism. The bipartisan pro-trade consensus has collapsed, as most congressional Democrats have opted to forsake the legacy of JFK for that of Herbert Hoover. A crucial House vote on fast track (now called “trade promotion authority”) is scheduled for today, Dec. 6, and at this point only a handful of Democrats support the bill - despite its unprecedented concessions to labor and environmental concerns. If fast track fails yet again, the newly launched “Doha Round” of World Trade Organization talks will be dead in the water. And on the other side of the aisle, House Republicans have nixed a Bush administration initiative to expand quotas and slash tariffs on textiles from Pakistan. Congressional myopia seems likely to prevail absent forceful intervention from the White House. President Bush has made amply clear that fighting terrorism is the overriding priority of his administration. To wage that fight with maximum effectiveness, he will need to convince Congress and the nation that promoting world trade will help to defeat the destroyers of the World Trade Center.

Free trade solves terrorism – it decreases isolationism, discourages radicalism, and decreases poverty Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute in Washington, 2003
*6/20/2003, “Can Free Trade Promote Peace in the Middle East?”, Cato, http://www.cato.org/publications/speeches/can-free-trade-promote-peace-middle-east, chip] After World War Two, Democratic and Republican administrations alike pursued trade expansion as an important pillar of America’s Cold-War policy. Trade promoted development in post-war Europe and Japan, and cemented relations among allies. War is pretty much unthinkable today among the major powers of Europe in part because of the trade and investment ties that bind their people together. September 11 and its aftermath have reminded us again that trade and foreign policy are intertwined. That connection between trade, security, and foreign policy will dominate the agenda at this weekend’s historic economic forum in Amman, Jordan, which will hear more about in a few minutes. Free trade is not a panacea, but it is a necessary building block for a more peaceful and prosperous Middle East. Free trade has helped to reduce poverty in those countries and regions of the world that have progressively opened themselves to the global economy. Free trade can till the soil for democracy and respect for human rights by creating an economically independent and growing middle class. Countries that are open to trade and global commerce are more likely to be working democracies that respect human rights. The Bush administration’s white paper on National Security Strategy last year emphasized the importance of trade in building a more secure world. In his May 9 address in South Carolina, President Bush said, “The Arab world has a great cultural tradition, but is largely missing out on the economic progress of our time. Across the globe, free markets and trade have helped defeat poverty, and taught men and women the habits of

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

liberty.” We have seen this dynamic in action in South Korea, Taiwan, Chile, Mexico, and other countries where economic reforms and openness have laid a foundation for political competition and democracy. Within the Arab world, those nations that have traveled the furthest on the road of economic reform, and Jordan certainly belongs on that list, are among the leaders of political reform as well. Sadly, the Arab world is a land that globalization has largely passed by-and their isolation is largely self-imposed. Average tariff barriers in the Arab Middle East are among the highest in the world, and as a consequence the region suffers from chronically declining shares of global trade and investment. Average annual inflows of foreign direct investment to Arab countries are only slightly larger than the inflows to Sweden; non-oil exports from Arab countries to the rest of the world are smaller than those of Denmark. There are more McDonalds franchises serving the 15 million people in the Netherlands serve the 280 million people in the whole Arab world. The government of Jordan took the positive step of joining the World Trade Organization in 2000, but WTO membership is still the exception in the Middle East. Here’s a pop quiz: What do Libya, Sudan, Syria, Iraq, Iran, and Afghanistan have in common? Besides all of them being ongoing or recent sponsors of terrorism, not one of them belongs to the WTO. Internal market freedom is also lacking in many Arab nations that are still suffering from a bout of so-called Arab socialism. Most Arab countries engage in widespread price controls and state-ownership of enterprises. They lack the legal and political infrastructure to enforce property and contract rights. Those policies have wrought dismal economic performance. The total gross domestic product of the 280 million people who live in Arab lands is smaller than that of Spain. According to a recent report by the UN Development Program, between 1985 and 1998, real per capita GDP declined in a broad swath of the Arab world. In contrast, real GDP during that same period rose by 30 percent in Israel, 90 percent in Chile, and more than doubled in Thailand, China, and South Korea. The record on civil and political freedom in the Arab world is no better. Freedom House, the human rights group in New York, reported in its latest study that only 25 percent of Muslim-majority countries in the world are democracies compared to 75 percent of non-Muslim countries. Freedom House noted in most recent report that, “the democracy gap between the Islamic world and rest of the world is dramatic,” and there is no sign that the gap is closing. That depressing reality feeds terrorism, not because of poverty but because of a lack of opportunity and hope for a better future, especially among the young. It’s a myth that poverty breeds terrorism. In fact, poverty is more widespread in sub-Saharan Africa and South Asia than in the Arab world, in part because of the network of private Islamic charities that help the poorest in society. And many terrorists are well educated and come from relatively privileged families. As Paul Blustein of the Washington Post wrote in a story from Cairo last year: “It is not poverty that drives their discontent so much as an economy that provides few chances for interesting work and upward mobility.” Young people who cannot find meaningful work and who cannot participate in the political process are ripe pickings for religious fanatics and terrorist recruiters. All of this gives urgency to the summit in Jordan this weekend, and to what the Bush administration is trying to accomplish with its proposal for a free trade area in the Middle East. The initiative concentrates on negotiating free trade agreements with willing and ready partners in the Middle East, with the goal of establishing a network of agreements within a decade.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Domestic Economy
Free trade lowers domestic commodity prices, improving standards of living Daniel Griswold, the director of the Center for Trade Policy Studies at the Cato Institute, 2010
*1/5/2010, “Why Populists Are Wrong About Impact of Free Trade”, Cato, Naples Daily News, http://www.cato.org/publications/commentary/why-populists-are-wrong-about-impact-freetrade] On trade, as on so much else, the populists have it wrong again. Free trade and globalization are great blessings to families in Naples and across America. Trade is delivering lower prices and more variety to consumers while creating better-paying jobs for the middle class. Beyond our shores, the spread of economic openness is building a more peaceful, democratic and humane world for our children. Now may seem an odd moment to tout the benefits of trade. After all, unemployment is 10 percent and housing and manufacturing remain in a slump. The great recession of 2008-09 was not caused by trade, however, but by misguided monetary and housing policies that were “Made in the USA.” “ On trade, as on so much else, the populists have it wrong again.” During difficult economic times, import competition allows more American families to keep their heads above water by delivering lower prices on staples such as food, clothing and shoes. The prices we pay for goods exposed to global trade tend to rise more slowly than inflation or even fall. The imported fresh fruit and vegetables, T-shirts and discounted sneakers sold at big-box retailers are especially important in the budgets of poor and middle-class families. Trade benefits producers by allowing Americans to sell our goods and services in growing markets abroad. Florida companies have been especially successful exporting to Brazil, Mexico and the rest of Latin America. Florida ranks fifth among states in total value of exports, with small and medium-sized companies accounting for almost two-thirds of state exports. For Americans worried about their jobs, it is a big lie that we have been surrendering middle-class manufacturing jobs for low-paying service jobs. In fact, since 1991, two-thirds of the net new jobs created in the U.S. economy have been in sectors such as health care, education and business and professional services where the average pay is higher than in manufacturing. Knock on doors in a typical middle-class neighborhood in southern Florida and you will meet teachers, managers, engineers, computer specialists, truck drivers, accountants, insurance and real-estate agents, registered nurses and other health-care professionals and self-employed business owners. These are the occupations that now form the backbone of the American middle class.

the ability to coerce extends only to the point where the value of political concessions equals a state’s value for economic ties. States are also limited in their ability to use asymmetric integration to coerce political concessions. Asymmetric dyads can be less peaceful than symmetrically dependent dyads. or they can enjoy the economic benefits of asymmetry. Note. Asymmetric dependence shifts the kinds of settlements states can expect in bargaining. to the extent that asymmetry reduces the ability of one party to signal. chip] Critics of globalization charge that asymmetric integration .pdf. Peace. which increases tensions and manifests itself in greater global violence.in which states are unevenly linked to the global economy .Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Asymmetric Integration Even asymmetric states have less negotiating power. As Wagner (1988) points out.21 Dependent states face coercion through markets. rather than the methods by which settlements are obtained. The growing power of markets is said to bind governments in a manner that hampers the ability of states to pursue their political interests abroad. but to the degree that relative bargaining power is subject to common conjecture. International Studies Quarterly 47.columbia. that this does not equate to the claim that asymmetry increases dispute propensity. they depend on a logic of contests in which the distribution of power is the critical determinative factor. Asymmetry clearly harms the bargaining power of the dependent state. however. and the Invisible Hand: Positive Political Externalities of Economic Globalization”.edu/itc/journalism/stille/Politics%20Fall%202007/readings%20w eeks%206-7/Gartzke%20War%20Peace%20Invisible%20Hand. states can demand political concessions. . “War. Other critics of globalization claim that integration threatens the political autonomy of sovereign states. Associate Professor of Political Science @ UC San Diego and Professor of international relations and international political economy at Texas A&M University.has the potential to increase conflict among states by leading to economic inequality and dependence. 2003 *Erik Gartzke and Quan Li. but asymmetric dyads should be at least as peaceful as dyads with few economic ties. Further. largely determine the contents of settlements. The informational approach suggests instead that power relations. while asymmetric dyads are less disputatious (or at least no more disputatious) than autarkic dyads. but this should not necessarily change the frequency of bargaining failure. if common knowledge to competitors. While these arguments are widely discussed and perhaps almost as widely accepted. http://www. coercion is constrained by basic accounting rules. A state cannot obtain preferred terms and reduce the probability of a contest with the same resources. Assuming optimizing behavior and a budget constraint. they are still significant to the global economy and can still threaten linkage termination. Instead. but they must concede benefits along one dimension to increase benefits in the other. Gartzke and Li. Asymmetrically dependent dyads can be more conflict prone than symmetrically dependent dyads. 561–586. asymmetry should have relatively little influence on whether states fight. If the cost of concessions exceeds the value of market linkages. then states prefer terminating linkages rather than being coerced. asymmetric dependence weakens the ability of states to credibly communicate.

. In summary. Sage Publications. and in particular monopoly rights. In France. The relative bargaining position of the state vis-4'-vis these sectors increases as producers become dependent on the government for tariff protection and regulated factor markets (Levi 1988.increased state assets to be used as military assets McDonald. both the French and German governments used these capacities to build coalitions in support of a more aggressive foreign policy before World War I.org/stable/4149808. the reinstitution of a broad series of tariffs reversing the Caprivi reforms created the financial and political means to unify agricultural and industrial interests behind the policy of Weltpolitik (Berghahn 1993. Moreover. If a firm wishes to locate to another economy. it can be regarded as a specific asset (Williamson 1985). 4. 2004. pp. provides the initial impetus for conflict." For example. The sale of these regulations enables the state to coopt support for its policies. No. the presence of economic regulation can also increase the potential for war by increasing the state's ability to build supportive coalitions that strengthen its domestic power . As the domestic influence of protectionist interests grows. it can restrict entry into domestic markets and regulate the terms of exchange between buyers and sellers. a governing elite. 2004 *Patrick J. and not protected societal interests. Aug. 48. In this second set of mechanisms linking protection and conflict. the capacity of consumers and exporters to lobby the state and produce a peaceful foreign policy declines. McDonald. protection increases the likelihood of war through two complementary mechanisms.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Protectionism Protectionism increases the likelihood of war.14 In Germany. Because the state possesses a monopoly on coercion and the consequent ability to define the basic structure of property rights. http://www. it necessarily loses this right and must repurchase it from another government. 37). the sale of economic regulations enhances the state's independent capacity to build supportive coalitions for policies that may include war. This market-making function allows the state to generate tangible assets and then sell these rights to economic groups in exchange for either revenue and/or political support (Stigler 1971 . Vol. associate professor in international relations theory and international political economy @ UT Austin. Because the right to sell goods in regulated markets is generally not transferable to another economy. . the need for approval from the Foreign and Finance Ministries before floating the loans of foreign governments in the Paris money market allowed the government to use the economy's vast financial reserves to shape balance-of-power diplomacy in Europe (Viner 1951 ). including the decision for war. protectionist interests may reduce opportunities for peace by actively supporting military expansion. chip] Although protected interests can push a society toward war to serve their own economic interests. As the protected sectors of the economy increase in size. 38-55). Industries that rely on protection to remain profitable are in many senses "captured" by the state and more likely to support its entire range of domestic and foreign policies. Second. The first concentrates on how competing societal interests over economic integration may shape foreign policy decisions.jstor. Grossman and Helpman 1994). a government can draw on a larger pool of society to support the use of military force against other states. The Journal of Conflict Resolution. 547-572. “Peace through Trade or Free Trade?”.

international investment positions now surpass global output. CSO+ Capital flows—cross-border non-foreign direct investments—can help developing countries grow. A key characteristic of the global financial crisis has been the mass swings of capital flows across the globe. capital rapidly left the . As economists James Gwartney of Florida State University and Richard Stroup of Montana State University put it in their book “What Everyone Should Know about Economics and Prosperity. CATO Institute. Trade delivers goods and services to those who value them most. 4-27-11. (3) Trade allows consumers to benefit from more efficient production methods.Economy Trade stabilizes global economy Tupy. 11 [Kevin P. cross-border capital flows tend to be “pro-cyclical”: too much money comes in when times are good. Columbia University economist Arvind Panagariya wrote in a paper “Miracles and Debacles: Do Free-Trade Skeptics Have a Case?”: “On the poverty front. I will do something good for you. Evidence supports the idea nations more open to trade tend to be richer than those that are less open. Large production runs. such as Germans producing beer and the French producing wine.cato. “If you do something good for me.” Capital protects economies Gallagher. there is overwhelming evidence that trade openness is a more trustworthy friend of the poor than protectionism. “Trading Away Financial Stability in Columbia: Capital Controls and the USColumbian Trade Agreement” p. those goods increase in abundance and quality. rapid growth has almost always led to reduction in poverty. Few countries have grown rapidly without a simultaneous rapid expansion of trade. Capital from abroad can fill that gap. many developing countries may lack the savings or financial institutions that can help finance business activity. large production runs would not be economical. (2) Trade allows partners to gain from specializing in the producing those goods and services they do best. Therefore. When the crisis hit. accessed 6-30-13. Indeed. Associate Proffessor at Boston University. Indeed. http://www. 6. Developing and emerging markets are no strangers to these flows. In turn.org/publications/commentary/free-trade-benefits-all. “Free Trade Benefits All”. However. L.” the motivation for trade can be summed up in the phrase. under normal circumstances. A glass of water may be of little value to someone living near the river but is priceless to a person crossing the Sahara. [Marian. Policy Analyst. are instrumental to reducing product costs. 1-3-6. and too much money evaporates during a downturn. in turn. the more the country benefits. 2. which raises real living standards. without large markets for goods and services. Lower production costs lead to cheaper goods and services. Economists call that the law of comparative advantage. For example.” There are three important reasons voluntary exchange is good not only for the contracting parties but the world as a whole: (1) Trade improves global efficiency in resource allocation. When producers create goods they are comparatively skilled at. the more capital flowing into a developing country. CSO] There is ample evidence people have been trading with one another since earliest times.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Good .

6-21-13. Free trade spurs economic growth Vitez. Traditionally. In addition to national benefits. 6-21-13. “Pros of Free Trade”. Business technology also allows companies to outsource service departments.S. Deman Media. Even though companies can produce certain goods domestically. Creating highly desirable goods allows nations to . Businesses may choose to purchase goods from a foreign country if significant advantages exist from foreign currency exchange rates.chron.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade developing world in a flight to the “safety” of the United States market. CSO] Nations engaging in free trade can also increase the purchasing power of businesses and individuals. In the attempt to recover. The result has been an increasing concern over currency appreciation. Government intervention can include tariffs. 13 [Osmond. capital controls can help smooth the inflows and outflows of capital and protect developing economies. 13 [Osmond. import limits and/or bans on specific goods. This theory often lies in the fact that nations can have more natural resources than another country. Nations who engage in free trade policies often increase the favorability of their business environment for business outsourcing. accessed 7-6-13. many industrialized nations. accessed 7-6-13. free trade allows companies to import raw materials for producing business goods domestically. favorable currency exchange rates can provide companies with better purchase opportunities. Most controls target highly short-term capital flows. http://smallbusiness.. Comparative advantage is the economic theory that countries can produce a certain type of good better than other countries. Deman Media. Companies can also make direct investments into foreign economies to produce goods at a lower cost in these environments. Countries can also have a large labor pool or other technical abilities for producing consumer goods.com/prostrade-3827. Free trade gives countries a comparative advantage – everyone benefits Vitez. CSO] Free trade is an economic theory that describes the import and export relations of multiple countries. Fluctuating currency rates offer businesses a way to consistently offer low price goods to consumers. to foreign countries.html. http://smallbusiness. “Pros of Free Trade”. Countries engage in free trade relations when companies and individuals can import and export goods free from government intervention. Free trade offers several advantages to countries. Foreign goods may also allow companies to increase their profits by taking advantage of currency exchange rates. businesses and individuals can also benefit from favorable free trade policies. and even inflation. have resorted to loose monetary policy with characteristically low interest rates. A comparative advantage usually allows countries to maximize the production efficiency of their labor force. usually conducted for speculative purposes.chron. Goods manufactured in foreign countries can then be exported to domestic economies with little to no government intervention. Free trade allows companies to lower their business costs by using the cheapest economic resources available. such as technical support or customer service. Relatively higher interest rates and a stronger recovery have triggered yet another surge in capital flows to the developing world.. Under these circumstances.com/prostrade-3827.html. including the U. writer for Deman Media.. writer for Deman Media. asset bubbles.

Emerging economies often have consumers or businesses looking to purchase copious amounts of resources for production or consumption purposes.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade generate high profits from exporting these items through the use of free trade agreements with other countries. . Free trade usually allows nations to improve their economic growth opportunities. Rather than relying on the fixed number of individuals in their domestic economy. Smaller countries may need to engage in free trade to acquire economic resources for producing consumer goods or services. Emerging economic environments also present high profit potential for companies exporting goods through free trade. countries can engage in free trade to improve business opportunities.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Good .Jobs .

These are the occupations that now form the backbone of the American middle class. accessed 6/30/13. If we are to believe that expanding trade .pdf. engineers. managers. The growth rate of jobs in the lower-paying service sectors in the past decade was only half the growth rate of jobs in the better-paying service sectors.5 million new jobs were created in the professional and business service sector. average earnings in manufacturing industries that showed net declines in employment (weighted by the number of job losses) were $10.”20 That pattern has continued through the current decade. the number of jobs also grew in service sectors that pay less than manufacturing. registered nurses.26 per hour.21 In total. vocational counselors. insurance and real estate agents. mostly unionized.22 Rising real wages and compensation during the past decade pose a serious challenge to the “trade is making us worse off” thesis. the American middle class today earns its keep from betterpaying service-sector jobs.org/sites/cato. loan officers. and selfemployed business owners. carpenters. The common story is that trade has caused the loss of well-paying. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. Between 1997 and the first half of 2007. 2007. informed a North Carolina audience. Ben Bernanke. labor market did in fact shed a net 3. Despite the mythologizing about manufacturing jobs. former director of the Herbert A. but that has been overwhelmed by a net gain of 11. and 1. truck drivers. During the same period. automotive service technicians.6 million jobs in sectors where the average wage is higher than in manufacturing (see Table 1). “During the 1990s. Knock on doors in a typical middle-class American neighborhood and you will meet people who work. two-thirds of the net new jobs created in the past decade are in sectors where the average wage is higher than in manufacturing .cato. Granted. but such jobs accounted for only a third of the net new jobs created in the past decade. the trend in recent decades has been for lower-paying factory jobs to be replaced by better-paying service jobs. CATO Institute. architects. middle-class manufacturing jobs while the service economy creates mostly lower-paying jobs in food service or retail. accountants and auditors. public relations specialists. computer specialists.org/files/pubs/pdf/tpa-036. While some better-paying manufacturing jobs have indeed disappeared. leisure. Another net 3. AS] Behind the rise in average real wages and compensation is a changing mix and growing number of middle-class service jobs. dental hygienists and other health care professionals. but two of every three new jobs are in sectors that pay more than the typical manufacturing job. wages in expanding serviceproviding industries (weighted by the number of jobs gains) were $11. Jobs added in the lower-paying retail trade.3 million manufacturing jobs. police officers and fire fighters. Manufacturing jobs really are being replaced by service jobs in our economy. not in factories. physical therapists. Stiefel Center for Trade Policy Studies.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Generic Free trade not only creates more jobs but also better ones. 7 [Daniel.63 per hour. Griswold.” the current chairman of the Federal Reserve Board. Education and health services alone added 4.1 million jobs between 1997 and 2007. and hospitality sectors—including flipping burgers and cashiering at big-box retailers— accounted for less than a quarter of the nonmanufacturing jobs added in the past decade. but in the service sector: teachers.3 million in financial activities—all sectors where average wages are significantly higher than in manufacturing. 1. October 25th.S. In a 2004 speech on “Trade and Jobs. the U.9 million in construction.”http://www. about 6 percent higher.

.S. how do the critics of trade explain the remarkable labor-market gains of the past decade? Since 1997.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade and competition with low-wage countries have eliminated highpaying manufacturing jobs and depressed the earnings of U. economy jumped by more than 16 million. are earning significantly higher real hourly compensation than workers a decade ago when the U. during a period of rapidly increased trade and globalization. as we’ve seen. economy was less globalized. And those employed workers. workers. the number of workers employed in the U.S. while the unemployment rate is now slightly below what it was a decade ago at a similar stage in the business cycle. That record is not an indictment of more liberal trade but a vindication.S.

not down.8 million since 1980.S. the U.org/sites/cato. CATO Institute.0 million since 1965.pdf.100.5 million since 1997. Despite fears of lost jobs.2 million—both growing at an identical annual rate of 1. the number of people employed in the U. AS] In the past four decades. accessed 6/30/13.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Studies/Statistics Free trade increases the amount of jobs in the US economy – statistics prove Griswold.S. negative effect on the number of jobs in the U. households jumped by almost one-third between 1995 and 2004. economy has increased from 71.5 million to 153. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. former director of the Herbert A.800 to $93. 7 [Daniel. CATO Institute. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. AS] Opponents of trade liberalization have sought to indict free trade and trade agreements by painting a grim picture of the economic state of American workers and households.1 million to 146. and 75. Stiefel Center for Trade Policy Studies.1 million. As Figure 1 shows. from $70. They claim that real wages \ have been stagnant or declining as millions of higher-paying middle-class jobs are lost to imports. .S. 2007. Griswold. workforce and total employment have each roughly doubled. • Median household income in the United States is 6 percent higher in real dollars than it was a decade ago at a comparable point in the previous business cycle.”http://www. during a time of expanding trade and globalization.pdf. accessed 6/30/13.73 percent. Studies over four decades indicate trade is good for job growth. October 25th. total employment in the U.S.”http://www.6 million jobs in sectors where the average wage is higher than in manufacturing. • The net loss of 3. 2007. • The median net worth of U.cato. • Average real compensation per hour paid to American workers. • Trade accounts for only about 3 percent of dislocated workers. Middle-class households have been moving up the income ladder.org/files/pubs/pdf/tpa-036. but will invariably resume its upward climb as the economy recovers . which includes benefits as well as wages. total employment has closely followed labor-force growth.org/sites/cato. Total employment will stall and even reverse during recessions. Contrary to public perceptions: • Trade has had no discernible.3 million manufacturing jobs in the past decade has been overwhelmed by a net gain of 11.5 million more people working than a decade ago. Two-thirds of the net new jobs created since 1997 are in sectors where workers earn more than in manufacturing. Stiefel Center for Trade Policy Studies. economy has grown by 16. Since 1965. economy. But the reality for a broad swath of American workers and households is far different and more benign.S. has increased by 22 percent in the past decade. Our economy today is at full employment. former director of the Herbert A.org/files/pubs/pdf/tpa-036. 7 [Daniel.cato. while the number in the civilian labor force has grown from 74. October 25th. Technology and other domestic factors displace far more workers than does trade. 46.4 After four decades of demographic upheaval. with 16.

Next. AS] The EPI model has little relevance to the real American job market. “More Trade.000 jobs lost per year.5 Obviously.) In my own April 2011 study of trade and the economy.6 percent is virtually the same as it was in 1965. 11 [Daniel. despite two recessions. The money we save from lower-priced imports also liberates consumer dollars to fuel growth elsewhere in our economy. Griswold. As I’ve pointed out before (here and here).S.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade technological transformations. dramatically rising levels of trade. Even when unemployment is low.” I found that civilian employment in the past 30 years has actually grown quite a bit faster during periods of rising trade deficits compared to periods of declining deficits. economy ADDED a net 15 million new jobs. former director of the Herbert A. when we could have expected it to have the most impact.000 manufacturing jobs. jobs are also being created by the net inflow of foreign capital.000 or more Americans file for unemployment insurance in a typical week. 1994-98. the current unemployment rate of 4. its model is based on an overly narrow view of trade’s impact on the job market. boosting their sales and employment. more jobs – NAFTA proves – the EPI study is wrong. consider the EPI numbers on their face. some people do lose their jobs because of import competition. the U. economy is perfectly compatible with a growing number of jobs and full employment.org/blog/more-trade-more-jobs. “The Trade-Balance Creed. no news there. . More Jobs. accessed 6/30/13. More trade. an increasingly globalized U.” http://www. (Check out the employment tables in the latest Economic Report of the President. the irrelevance of the EPI model becomes plain. So even if true.900 net jobs lost came over a 16-year period. In the 16 years since its passage. our economy still employs 20 million more workers than it did the year before NAFTA passed. Stiefel Center for Trade Policy Studies. Those alleged 682. but trade also creates jobs through increased exports. CATO Institute. That’s a bit more than 40. 5/5/11. When we look at the actual job market performance since NAFTA was enacted. In the first five years after NAFTA’s passage. And even if we run a trade deficit with a country such as China or Mexico. including 700. the EPI job loss numbers amount to less than one day’s worth of job displacement for the whole year. which spurs domestic job creation through lower interest rates and direct investment.cato. That is a drop in the bucket in a dynamic economy like ours that creates and eliminates about 15 million jobs each year. Yes. and half a dozen recessions and recoveries.S. and cuts costs for import-consuming businesses. just the opposite of what EPI’s distorted model would predict. 300.

improving the median net worth of American households by almost one-third.S. current indicators for worker and household wellbeing have continued to follow a long. Those who blame trade for “declining real wages” and a “shrinking middle class” are guilty at the very least of a lack of perspective. is measurably better off today after a decade of healthy trade expansion. 7 [Daniel. According to all the major indicators of economic and financial well being. living standards. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. Our full-employment.pdf. allowing more goods and services to be produced in an average hour of work. 2007. former director of the Herbert A. But when we account for the passing phases of the business cycle.6 percent higher real hourly compensation than a decade ago. opponents of trade liberalization have sought to exploit temporary downturns in the U. Trade cannot be blamed for causing recessions.org/files/pubs/pdf/tpa-036. CATO Institute. Real median household income continues to trend upward while the share of households earning more than $35. While debts have increased since the mid1990s. October 25th. 16. Griswold. To promote further progress for American workers and households. AS] The anecdotes and skewed comparisons used to argue against trade liberalization are contradicted by the actual progress that American workers and families have made in the past decade. As Table 2 summarizes. ongoing. leading to higher real compensation per hour and a higher median household income than if our economy were less open to trade. Congress and the administration should pursue policies that expand the freedom of Americans to participate in global markets. . Even the best economists have not figured out how to repeal the business cycle. In part because of expanding trade.5 million more Americans are working than a decade ago and the rate of unemployment has dropped. For political and ideological reasons. The large majority of Americans.S. upward trend in U. American families emerge from each recession and recovery in a better place economically than they would be without trade.000 a year in inflation-adjusted income continues to climb. Americans are better off than they were at a comparable point in the previous expansion.”http://www. They have confused the passing pain of a cyclical downturn with the long-term. Trade does. including the typical middle-class family. accessed 6/30/13.cato. however. Trade expansion and growing globalization have helped raise the standard of living for a broad swath of Americans. Stiefel Center for Trade Policy Studies. free-trade economy has also delivered 21.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade High Paying Jobs Trade increases the amount of high-paying jobs – their authors’ studies are too short-term.org/sites/cato. boost the overall productivity of the economy and individual workers. economy to indict the value of trade and tradeexpanding agreements. upward trend. asset values have increased far more rapidly.

9 billion a year. In the past four years. further. compared to 34 percent in the preceding 10 years. American cash hasn’t exactly been gushing southward. NAFTA Continues to Pay Dividends” http://www. but that is a small number when spread over a decade and when compared to the millions of jobs being eliminated and created every quarter in the U.000 Americans have qualified for trade adjustment assistance under a special program for workers displaced by imports from Mexico. high-standard economies.org/publications/commentary/after-10-years-nafta-continues-paydividends?print. than they do in such developing countries as Mexico. about 400. America’s unemployment rate is actually lower today than it was in the year before NAFTA went into effect. ill-informed domestic critics continue to assert that NAFTA has cost hundreds of thousands of American jobs and.S. Griswold. In the first five years of NAFTA. economy. and Canada. America’s direct manufacturing investment in Mexico has averaged $1. In fact. AS] Nevertheless. By allowing American manufacturers to more efficiently allocate their production. accessed 6/30/13. There has been no “giant sucking sound” of jobs and investment heading south.S. economy has added a net 18 million new jobs. such as those of Western Europe and Canada. Total manufacturing output in the United States has risen 41 percent during the past ten years. 4 [Daniel.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Latin America Specific Free trade agreements with Latin American countries increase job growth – their NAFTA studies go our way. now produces about the same number of cars and light trucks in the United States as it did before the agreement. for example. investment in Mexico has increased. 1/8/4. But an objective look at the record shows that none of the dire warnings about the agreement have come true. In the past decade.S. NAFTA has been a blessing for many U.S. economy added a net half million manufacturing jobs. manufacturing. the U.S. former director of the Herbert A. is somehow responsible for the lingering recession in U. Though U. a fraction of the $200 billion invested annually in our domestic manufacturing capacity. Since NAFTA. Mexico.cato. manufacturers. They use NAFTA as an argument against proposed trade agreements with Central American and other Latin American countries. “After 10 Years. but it assembles those vehicles more cost-effectively by spreading out its sourcing among the three NAFTA countries — the United States. NAFTA deserves a share of the credit for the healthy uptick in U. the U. Stiefel Center for Trade Policy Studies. U.S. companies invest far more each year in other high-wage. worker productivity since the mid1990s.S. Our domestic automobile industry. CATO Institute. .S.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Cuba Specific Lifting the sanctions on Cuba would create jobs.

Free Trade

Maness, intern with the National Center for Policy Analysis, 3
(Amy, 1/14/3, National Center for Policy Analysis, “Should We Trade With Cuba,” http://www.ncpa.org/pub/ba427, accessed 7/3/13, AS) Cuba's population of 12 million is in need of everything, and other countries are offering it.¶ A recent Texas A&M study commissioned by the Cuba Policy Foundation shows that U.S. farmers lose $1.24 billion each year due to the embargo. [See the Figure.]¶ Lifting the sanctions would generate an additional $1.6 billion in U.S. GDP, $2.8 billion in sales and 31,262 jobs.¶ In the 10 months since Congress enacted the Trade Sanctions and Export Reform Act of 2000 - allowing cash sales of agricultural commodities - Cuba has purchased almost $200 million in U.S. food and agricultural products from 34 states.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Efficiency/Productivity
Trade leads to more efficiency and productivity which is essential for job creation

Kim, Senior Policy Analyst, Economic Freedom, 10
(Anthony B, 5/19/10, Heritage.org, “Free Trade: Key to Job Creation,” http://blog.heritage.org/2010/05/19/free-trade-key-to-job-creation/, accessed 6/30/13, AS)
Trade critics charge that free trade damages U.S. firms and workers. It’s true that individuals can experience trade-related job loss. Balanced against that, however, must be the overall gains in U.S. employment and productivity that stem from an open trading environment. Indeed, free trade fosters economic efficiency, which is the basis for dynamic growth and job creation. In a recent report entitled “Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners,” the U.S. Chamber of Commerce points out that more than 17 million American jobs depend on trade with U.S. FTA partners, and in 2008 alone, over five million jobs were created by the boost in trade unleashed by the FTAs. Chamber President and CEO Tom Donohue appropriately remarked, “I defy anyone in town to name another budgetneutral government initiative that has generated anything like this number of jobs.” Unfortunately, in recent years, free trade has become a victim of special interest politics in the U.S. America’s competitiveness, credibility and leadership in global markets are at stake and American workers and firms will prosper more, even in a time of economic slowdown, if the U.S. continues its historical trend towards trade liberalization and openness. Regrettably, Congress, bowing to labor union pressure, has focused on demands for concessions from other nations. Such intransigence has a cost. While America merely talks about trade, the rest of the world actually moves forward with new trade pacts, which push U.S. firms towards the sidelines and take away opportunities for more job creation.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

Competitive Exports
Free trade means more competitive exports that create jobs. US Chamber of Commerce, 10
*Chamber of Commerce, 7/8/10, “Opening Markets, Creating Jobs: Estimated US Employment Effects of Trade with FTA Partners,”http://www.uschamber.com/sites/default/files/reports/100514_ftajobs_full_0.pdf, date accessed 6/30/13, AS] To properly evaluate the impact of free trade agreements, one must ¶ understand all the pieces of the economy that are affected by them. Trade ¶ agreements — even those with relatively small economies — impact the U.S. ¶ economy in a range of ways. Most Americans are familiar with the benefits to ¶ exports. When FTA partners reduce their barriers to U.S. goods and services ¶ exports, U.S. exports of goods and services become more competitive in the FTA ¶ partner market. U.S. companies win more sales, particularly relative to other ¶ trading partners that still face tariffs or non-tariff barriers in the FTA partner ¶ market. As U.S. companies export more, they are able to increase U.S. ¶ production — and perhaps employment5¶ — in the United States. These are what ¶ are known as the “direct effects” of increases in exporting. The economic effects of trade agreements are not limited to the more ¶ obvious direct export effects. Additional indirect effects can outweigh the direct ¶ ones. For example, to meet new demand for exports, producers of U.S. goods ¶ and services buy more raw materials and equipment from other sectors of the ¶ U.S. economy — and from abroad — which increases output (and, again, ¶ perhaps employment) in these other sectors.6¶ As jobs expand (high ¶ unemployment case) and/or worker income grows (low unemployment case), ¶ U.S. consumer spending grows and that, in turn, supports still more jobs in nontraded goods and services sectors of the economy.

org/sites/cato. former director of the Herbert A. First. or trade agreements have caused the loss of some specific number of jobs during a certain period of time are misleading if they imply that today’s economy has that many fewer jobs than it would have otherwise. and capital machinery at lower. is that a country will tend to export what it can make more efficiently relative to what else it . One channel is expanding exports. During the debate over NAFTA in 1993. Trade does cause certain jobs to disappear. but about better jobs. Ross Perot famously predicted that passage of the agreement would create “a giant sucking sound” as jobs and investment headed south across the border. AS] Trade is not about more jobs or fewer jobs. stimulating further employment gains. October 25th. as U. if workers. But trade as a rule does not affect the total number of jobs or the overall rate of employment or unemployment. the much-misunderstood reality of comparative advantage means that our economy will always be globally competitive in a range of sectors. 2007. Trade competition also reduces costs for U. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. domestic as well as international.S. producers by allowing them to buy raw materials. capital. The insight of comparative advantage. jobs eliminated by import competition will quickly be replaced by jobs created elsewhere. 7 [Daniel. intermediate inputs. and resources can shift within the domestic economy. Lower producer costs translate into higher profits. If we lose our competitive edge in one sector or industry. accessed 6/30/13.pdf. Trade also delivers lower prices on imported consumer goods. because of shifting technology and factor prices or the emergence of new global competitors. Globalization also means more international investment flowing into the United States.org/files/pubs/pdf/tpa-036. Focusing merely on jobs lost because of imports ignores the offsetting jobs that trade and globalization create through other channels. trade deficits.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade AT: Job Displacement Even if they can win free trade initially causes job losses.cato. countered that NAFTA would create hundreds of thousands of net new jobs. certain companies to go out of business. Stiefel Center for Trade Policy Studies. Independent presidential candidate H. and certain sectors of the economy to shrink. first expounded by David Ricardo in 1817. That is what we would expect from increased competition. Studies that claim that trade expansion. Advocates of the agreement. thus promoting greater investment and job creation by domestic companies Second. Inward foreign direct investment creates jobs by establishing foreignowned production facilities in the United States. while inflows of financial capital create jobs by reducing long-term interest rates. the competitive edge of other sectors will be enhanced. Both sides were wrong to the extent they predicted a net change in jobs either way. Trade does not affect the total number of jobs in an economy for three reasons. more competitive global prices. those will be offset with better jobs – three reasons Griswold. including the Clinton White House. CATO Institute. attracting more investment and creating more employment in those sectors that benefit from open markets. giving households more money to spend on domestic goods and services.S.”http://www. Advocates of trade liberalization who claim that lower barriers boost the total number of jobs in our economy are as wrong as skeptics who argue that lower barriers mean fewer jobs. people on both sides were guilty of this fundamental mistake. producers ramp up production to meet demand abroad as well as at home.

in turn. creating an average annual net job gain of 1. Griswold. October 25th. exports more attractive. By that yardstick as well.cato.000 people will file claims for unemployment insurance. That provides plenty of sound bites and television images for the critics of trade.7 million. stimulating employment in export sectors while dampening demand for imports. economy creates and destroys millions of jobs. According to the U. about 10. Job displacement because of expanding trade also appears small when compared to weekly filings for unemployment compensation. but the other half is permanent. If a surge in imports did cause widespread layoffs in certain sectors. ensuring that we will always be competitive in a range of global export markets. meaning that each year about 15 million jobs disappear. . If the estimates of job losses from trade expansion are correct. thus offsetting initial jobs losses . And yet. even when the economy is humming. never to be seen again.1 million jobs were created and 30. 7 [Daniel. Another country may (in theory. but we can still gain from exchanging what each country is relatively most efficient at producing. trade would be responsible for about 3 percent of the overall churn in the labor market. accessed 6/30/13. workers displaced by expanding trade account for only 3 percent of total displaced workers. the reality of comparative advantage means that we will likely gain competitiveness and export share in pharmaceuticals. former director of the Herbert A. but gain jobs in financial analysis or computer engineering. in a typical week.S. Their claims are exaggerated – trade only accounts for 3% of displaced jobs. Department of Labor. the resulting increase in unemployment would push the Federal Reserve to tilt toward a looser monetary policy and lower interest rates to stimulate the overall economy. financial services. the U. where we are relatively less efficient. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. would make U.We may lose call center jobs. AS] Every year.org/files/pubs/pdf/tpa-036. civil aircraft. anyway) be able to produce everything at a lower per unit cost than we can produce domestically.000 workers lose their jobs in a typical week because of trade-related causes. American workers will always be relatively more productive in some sectors than others in the domestic economy. an average of 32. trade tends not to affect the overall number of jobs because of other.10 If changing flows of trade account for the loss of 500.S. Third.org/sites/cato.”http://www. Increased imports would also have the effect of pumping more dollars into international markets. A weaker dollar.pdf. Stiefel Center for Trade Policy Studies. If the United States loses its shoe industry to lowercost global competition.000 jobs a year. more powerful and counterbalancing factors in the broader economy such as monetary policy and foreign exchange rates. 2007. causing the dollar to depreciate on foreign currency markets. CATO Institute.4 million were eliminated annually between 1992 and 2006.S.9 About half the churn is seasonal.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade could produce domestically given its own endowment of resources. more than 300. and other sectors where we are relatively more efficient than making shoes.

There is nothing unique or disturbing about the fact that changes in international trade account for a small share of job displacement in the U. Department of Labor’s biannual projections.”http://www. former director of the Herbert A.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Too many alt causes to blame trade for job loss.[7] The recovery and expansion of job creation that has already begun in the IT sector should continue into the future. and other broader factors. 4 [Daniel.”http://www. introduction of the personal computer 25 years ago has eliminated hundreds of thousands of jobs for typists.pdf. “Trading Up How Expanding Trade Has Delivered Better Jobs and Higher Living Standards for American Workers. accessed 6/30/13. It is simply wrong to blame trade for causing a net loss of jobs or anything other than a small fraction of job displacement. Free trade swaps bad jobs for good ones which allow for industry expansion and more jobs – IT proves. the flexibility of employers to hire or lay off workers.cato. and vice versa. New York.org/sites/cato. and telephone operators. According to the U. 2007. Stiefel Center for Trade Policy Studies. CATO Institute. just as a country with a closed economy can suffer high unemployment. Tower Records shut down its U. business investment. not because of imports. “Why We Have Nothing to Fear from Foreign Outsourcing. jobs lost in one area will tend to be replaced by jobs created in another. accessed 6/30/13. affects the type of jobs in our economy but not the total number. Kodak. stores and laid off workers. has laid off 30. October 25th. and production positions eliminated because of the migration of readers and advertising to the Internet.S.[8] “The demand for computer-related occupations should increase. including those for the Internet and Intranets. despite the recent downturn. Griswold. former director of the Herbert A. For example. AS] Just as the free traders predict. 7 [Daniel. a rate of growth twice as fast as employment in the rest of the private economy .S. CATO Institute.org/publications/free-trade-bulletin/why-we-havenothing-fear-foreign-outsourcing. Trade. If workers and capital can move freely between states and between sectors. Stiefel Center for Trade Policy Studies.000 workers since 2004—not because of unfair trade by foreign competitors. The daily newspaper business has seen venerable papers close their doors and hundreds of thousands of reporting.org/files/pubs/pdf/tpa-036. the camera company headquartered in Rochester. editing. we are swapping less skilled and lower paying jobs for relatively higher skilled and better paying jobs. Workers also lose their jobs because of changing consumer tastes and domestic market competition as one American company cuts into the market share of another. labor market. as a result of rapid advances in computer technology and the demand for new computer applications. the number of jobs in computer and mathematical science occupations is expected to increase from three million to four million in the next decade. 1/13/9. Griswold. but because of the proliferation of digital cameras and plunging sales of film. secretaries. The overall number of jobs depends on the growth rate of the economy and labor force.cato. like technology. but because iPods and other digital-music devices have cut deeply into sales of compact discs.” the department reported in the . AS] What accounts for the other 97 percent of job turnover? Technology probably accounts for most permanent job displacement. A nation open to the global economy can enjoy low unemployment.S.

the IT recession has been painful for hundreds of thousands of workers who lost jobs and were forced to find new employment. and we have solid reason to believe opportunities for employment in the field will expand in the coming decade. Average wages fell 1.” Most of the new jobs will be in computer systems design and related services and in the information industry. data processing and related sectors.440 (in contrast to a 1 percent increase for other workers. and Internet-related industries.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade February 2004 issue of its Monthly Labor Review.330 to $67.)[10] But IT jobs still remain among the best paying in our economy. Compensation in the industry has also been under pressure because of the temporary drop in demand for services and workers.3 percent in ITproducing industries in 2002 from the year before. however. primarily in software publishing. “Growth will not be as rapid as during the previous decade. as the software industry begins to mature and as routine work is increasingly outsourced overseas. . from $68.[9] Of course.

. employment rose briskly for parents and affiliates alike in the boom of the late 1990s. ““Shipping Jobs Overseas” or Reaching New Customers? Why Congress Should Not Tax Reinvested.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade AT: Outsourcing Outsourcing is wrong – foreign and domestic operations complement each other.2 percent increase in domestic investment by the same company and a 4 percent increase in compensation for its domestic workforce. it’s likely that the loss of net jobs in the domestic U. accessed 6/30/13.” http://www. parent and affiliate employment have tracked each other since the early 1980s.S. economists Mihir A. CATO Institute. during the 1980s and 1990s. 1/13/9. the company enjoyed booming global sales because of strong growth in overseas markets.S. More activity and sales abroad often require the hiring of more managers. and numbers of employees. fell for both during the downturn and slow recovery of 2001 through 2003. Hines Jr. former director of the Herbert A.667. As a result. Griswold.owned affiliates comes at the expense of overall employment by parent companies back home in the United States. They also found a positive connection between foreign and domestic sales. accountants. and production workers at the parent company.S. 9 [Daniel. C..S. From 2005 through 2007. As Figure 1 shows.” There is no evidence that expanding employment at U. A 2005 study from the National Bureau of Economic Research found that. the company expanded its domestic employment from 43. multinational companies has continued into the current decade.S. found that a 10 percent increase in capital investment in existing foreign affiliates was associated with a 2. According to the company’s 2007 annual report.8 Although the numbers have not been reported yet for 2007 and 2008.788. economy will be mirrored by much slower growth or outright decline in foreign affiliate employment. Desai. the Peoria.545. a healthy increase of 6. especially those with resources extracted from the ground.238 to 50. there was “a strong positive correlation between domestic and foreign growth rates of multinational firms. More recently. During that same three-year period. lawyers. and James R. “Greater foreign activity spurs higher exports from American parent companies to foreign affiliates and greater domestic R&D spending. Caterpillar earned 63 percent of its sales revenue abroad.000 workers. multinational companies at home and abroad. including $1 billion in sales in China alone.S. multinational companies points in the opposite direction: foreign and domestic operations tend to compliment each other and expand together. Stiefel Center for Trade Policy Studies.org/publications/free-tradebulletin/shipping-jobs-overseas-or-reaching-new-customers-why-congress. engineers. Fritz Foley.6 “Foreign production requires inputs of tangible or intellectual property produced in the home country. AS] More Jobs Abroad. multinational companies. A successful company operating in a favorable business climate will tend to expand employment at both its domestic and overseas operations. assets. the evidence and experience of U. an increase of almost 10.cato. In fact.878 to 50. and then rose again from 2003 through 2006.” the authors explained..5 Caterpillar’s experience is not unusual for U. Consider Caterpillar Inc.” After analyzing the operations of U.”7 The positive connection between foreign and domestic employment of U. More Jobs at Home Investing abroad is not about “shipping jobs overseas. Illinois-based company known for making giant earth-moving equipment. Caterpillar ramped up employment at its overseas affiliates during that time from 41.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade .

compared to those in which it was shrinking. 1992-95.2% a year during periods of rising deficits. as well. People who blame job losses on trade deficits should consider this: Civilian employment expanded at a healthy 1.org/publications/commentary/beneficiaries-trade-you-me. Apparently. To the contrary. equity prices (as measured by the Standard & Poor’s 500 Index). 1997-2000. economy shows no sign of suffering during periods when the trade deficit is expanding. I then examined how the U. Griswold. and jumped a painful one point per year when the deficit was trending down. services and assets we freely choose to trade. the U.S.S. CATO Institute. 2000-01 and 2006-09. and shrank by 2% a year when the trade gap was contracting. trade policy should be to maximize the freedom of Americans to buy and sell in global markets for mutual gain. The aim of U. the trade deficit has grown as a share of GDP during five sustained periods: 1982-84.cato. real GDP grew more than three times faster at an annualized rate — 3. The S&P 500 climbed an annualized average of 11% during periods when the deficit was “worsening” compared with less than 1% during periods when it was “improving.4 percentage points per year when the trade gap was on an upward trend. A rising trade deficit was good news for investors. former director of the Herbert A. Stiefel Center for Trade Policy Studies. accessed 6/30/13. versus 1% — during periods when the trade deficit was expanding.4% a year during periods of rising trade deficits. the only thing worse for the U. manufacturing output. economy performed during each of these periods in terms of real gross-domestic-product growth. AS] Since 1980. manufacturing output expanded at a robust 5. while job growth was virtually zero during stretches when the deficit was shrinking. The jobless rate declined an average of 0.S.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker AT: Trade Deficits Free Trade Employment increases during periods of rising trade deficits. Contrary to the prevailing orthodoxy.6%. “Beneficiaries of Trade: You and Me” http://www. 2001-06 and 2009-10. It has shrunk during three sustained periods: 198792. . whatever the mix of goods. 7/11/11. economy than a rising trade deficit is a falling one. Politicians obsessed with the trade balance should give up the goal of promoting exports over imports.S.” Despite worries that trade is causing the de-industrialization of America. total civilian employment and the unemployment rate. 11 [Daniel.

S. This effect is uneven.S. 10 *Chamber of Commerce. “Opening Markets. ¶ production can make U. as some sectors benefit more than others ¶ from access to lower-cost inputs. 7/8/10. date accessed 6/30/13. contributing to the uneven effect that an FTA ¶ can have across U. yet they are critical to the overall ¶ analysis. if imported goods and services are ¶ consumer products that now cost less.S. as is the case ¶ with exports. ¶ Increased imports can replace U.pdf. and U. They are not as ¶ obvious as imports replacing U.S. the savings consumers experience enable ¶ them to spend more on other goods and services (which creates new jobs or ¶ boosts income) or to save more (which lowers interest rates).Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade AT: Imports Even increased imports create more jobs US Chamber of Commerce. ¶ This means ¶ that imports of ¶ these goods ¶ and services ¶ become less ¶ costly. All in all. Creating Jobs: Estimated US Employment Effects of Trade with FTA Partners. ¶ imports ¶ increase.S. For example. among others.S. the lower cost of imported goods that are raw materials or machinery or other inputs to U. production.S. In addition.com/sites/default/files/reports/100514_ftajobs_full_0.S. . However. firms and workers. employment directly linked to that production decline. production ¶ and U. jobs associated with bringing imports to their ultimate ¶ customer may increase with imports — from the dockworkers to the truckers to ¶ the warehouse operators to retailers. Finally.S.”http://www. producers or services providers more competitive in ¶ global markets. This is a direct ¶ negative impact on competing U. sectors. barriers to ¶ trade in goods ¶ and services ¶ with the FTA ¶ partner country.uschamber. at which point U. there are important indirect effects at play as well. AS] In addition ¶ to increased ¶ exports. trade ¶ agreements ¶ also eliminate ¶ U.S. the job ¶ effects of imports are not necessarily a net negative. production.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Good .Poverty .

These critics take it as a given that anyone with a good word for this process is naive or corrupt and. The entrenched advantages of advanced nations--their infrastructure and technical know-how. And then something changed. developing countries like Indonesia or Bangladesh were still mainly what they had always been: exporters of raw materials. In those days. . global poverty is not something recently invented for the benefit of multinational corporations." I guess I should have expected that this comment would generate letters along the lines of. the biggest beneficiaries are. it is still better to produce in the First World--stories of companies that moved production to Mexico or East Asia. Given this lack of other opportunities.single. Slate. they are a big improvement over the "previous. less visible rural poverty . But matters are not that simple. a de facto agent of global capital in its oppression of workers here and abroad. their political stability and the subtle-but-crucial social adaptations that are necessary to operate an efficient economy--seemed to outweigh even a tenfold or twentyfold disparity in wage rates. cheap labor was not enough to allow a developing country to compete in world markets for manufactured goods. Inefficient manufacturing sectors served their domestic markets.html. Third World workers. are common. 97 (Paul. http://www. in either case. in which I had pointed out that while wages and working conditions in the new export industries of the Third World are appalling. importers of manufactures. "Well. Let's turn the clock back to the Third World as it was only two decades ago (and still is. then moved back after experiencing the disadvantages of the Third World environment. cheaper air transport--reduced the disadvantages of producing in developing countries. KR) The occasion was an op-ed piece I had written for the New York Times. After all. yes. Meanwhile. While fat-cat capitalists might benefit from globalization. let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through.com/articles/business/the_dismal_science/1997/03/in_praise_of_cheap_labo r. Professor of economics at Princeton. but generated few jobs. (Other things being the same. But in the mid-'70s. although the rapid economic growth of a handful of small Asian nations had started to attract attention. And so countries that had previously made a living selling jute or coffee started producing shirts and sneakers instead. “In Praise of Cheap Labor”. population pressure pushed desperate peasants into cultivating ever more marginal land or seeking a livelihood in any way possible--such as homesteading on a mountain of garbage.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade General Trade solves poverty-the alternative is even lower-paying farm work-Taiwan and South Korea prove trade boosts wages in the long term Krugman.) In a substantial number of industries. 1997. the vastly larger size of their markets and their proximity to suppliers of key components. improved telecommunications." Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. sheltered behind import quotas. and the moral lines are not that clear. in many countries). In fact. Some combination of factors that we still don't fully understand--lower tariff barriers. if you lose your comfortable position as an American professor you can always find another job-as long as you are 12 years old and willing to work for 40 cents an hour. March 21.slate. low wages allowed developing countries to break into world markets. you could hire workers in Jakarta or Manila for a pittance. Workers in those shirt and sneaker factories are.

A shocking one-third of young children are still malnourished--but in 1975. and so on who make up the bulk of these countries' populations. And it might not even do that. and urban wages also begin to rise. however. And so there are self-righteous demands for international labor standards: We should not. and that minimum is determined by the other opportunities available to workers. day laborers. leaving the poor majority no better off. This sounds only fair--but is it? Let's think through the consequences. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs. scavengers. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. where living on a garbage heap is attractive compared with the alternatives. until recently. then. the women and children in the sneaker factory are working at slave wages for our benefit--and this makes us feel unclean. wherever the new export industries have grown. Deny them that ability. and you might well deny them the prospect of continuing industrial growth. And these are still extremely poor countries. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat.100 to more than 2. since 1970. More importantly. (Smokey Mountain persisted because the Philippines. First of all.¶ Why. did not share in the export-led growth of its neighbors. there has been measurable improvement in the lives of ordinary people.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade inevitably. the growth of manufacturing--and of the penumbra of other jobs that the new export sector creates--has a ripple effect throughout the economy. has lately shrunk to virtually nothing. be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions. Jobs that pay better than scavenging are still few and far between. which are as callous and corrupt as ever. Where the process has gone on long enough--say. even . the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.) The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land--or of a Filipino scavenging on a garbage heap? The main answer.800 calories a day. Similar improvements can be seen throughout the Pacific Rim. the pool of unemployed urban dwellers always anxious for work shrinks. I say "inevitably" because their employers are not in business for their (or their workers') health. Nor is it the result of the benign policies of national governments. per capita intake has risen from less than 2. even if we could assure the workers in Third World export industries of higher wages and better working conditions. never large. whose only concern was to take advantage of the profit opportunities offered by cheap labor. The advantages of established First World industries are still formidable. And eventually people are no longer eager to live on garbage dumps. the opponents of globalization insist. forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy. the fraction was more than half. These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid. this would do nothing for the peasants. but no matter how base the motives of those involved. they pay as little as possible. and even in places like Bangladesh. It is not an edifying spectacle. is a sort of fastidiousness. in South Korea or Taiwan--average wages start to approach what an American teen-ager can earn at McDonald's. The pressure on the land becomes less intense. Unlike the starving subsistence farmer. At best. so rural wages rise. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. And yet. I think. paid very little and expected to endure terrible working conditions. so factories start to compete with each other for workers.

and mass production Tupy. Washington Times. The urban poor gain from higher unskilled wages. p 521. Trade delivers goods and services to those who value them most. Poverty and the WTO. Economists call that the law of comparative advantage. may particularly help the poor Brazilian farmers. and particularly domestic trade reforms. . On average in developing countries.cato. Trade solves poverty-it boosts unskilled wages Hertel.” the motivation for trade can be summed up in the phrase. the number of poor at the US$1 per day level would decline by some 32 million globally under a full trade reform scenario. corresponding to only a modest increase in real wages of the unskilled. Sussex economics professor. And since export-oriented growth. the urban poor benefit indirectly from the gains in agriculture because the pressure on nonagricultural unskilled workers is relieved somewhat. 6 (Thomas Hertel and L Alan Winters. p 521.6 percent versus 0. even in nonagricultural sectors. such as Germans producing beer and the French producing wine. Assuming import tariff revenues are replaced by taxes on the nonpoor. KR) The global impacts from trade reform on poverty are positive to the extent that the existing patterns of trade protection favor skilled labor and capital relative to unskilled workers. http://www. KR) The positive impact of full liberalization is not limited to rural areas and nonagricultural activities. but only broad-based high growth will eradicate urban poverty.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker reverse the growth that has been achieved. has been a huge boon for the workers in those nations. the primary source of income for many of the world’s poor. might assuage our consciences. This is reflected in the pro-poor shift in the urban income distribution. and other contributors. KR) There is ample evidence people have been trading with one another since earliest times. Poverty and the WTO. I will do something good for you.” There are three important reasons voluntary exchange is good not only for the contracting parties but the world as a whole: (1) Trade improves global efficiency in resource allocation. Sussex economics professor. Purdue economics professor and Winters.org/publications/commentary/free-trade-benefits-all. and other contributors. “Free Trade Benefits All”. those goods increase in abundance and quality. When producers create goods they are comparatively skilled at. so that their removal lifts unskilled wages. As economists James Gwartney of Florida State University and Richard Stroup of Montana State University put it in their book “What Everyone Should Know about Economics and Prosperity. Free Trade Trade solves poverty-protectionism favors capital Hertel. but no jobs in practice. comparative advantage. 6 (Thomas Hertel and L Alan Winters. “If you do something good for me. A policy of good jobs in principle. Three reasons trade solves global poverty-resource allocation. 1/3/2006. but it is no favor to its alleged beneficiaries. the real wage of unskilled workers-deflated by a food and clothing CPI-rises four times as much as average real income (3. accessed 6/30/13. Purdue economics professor and Winters. assistant director of the Project on Global Economic Liberty at Cato. anything that curtails that growth is very much against their interests. In addition. A glass of water may be of little value to someone living near the river but is priceless to a person crossing the Sahara.8 percent). for all its injustice. 6 (Marian. The impacts from a Doha scenario are much less. (2) Trade allows partners to gain from specializing in the producing those goods and services they do best. Trade reform.

democratic and humane world for our children. Columbia University economist Arvind Panagariya wrote in a paper “Miracles and Debacles: Do Free-Trade Skeptics Have a Case?”: “On the poverty front. About 50 percent of sub-Saharan African exports come from a single country.cato. the populists have it wrong again. Now may seem an odd moment to tout the benefits of trade. protection does not guarantee prosperity — quite the opposite. Combined with “preferential treatment” of their goods in rich countries’ markets. accessed 6/30/13.938. “Why Populists Are Wrong About Impact of Free Trade”. sub-Saharan African producers enjoy a substantial advantage over other foreign competitors. unemployment is 10 percent and housing and manufacturing remain in a slump. KR) On trade. in other words.org/publications/commentary/why-populists-are-wrong-about-impact-freetrade. Naples Daily News. 10 (Daniel. South Africa. are instrumental to reducing product costs. After all. Free trade and globalization are great blessings to families in Naples and across America. Evidence supports the idea nations more open to trade tend to be richer than those that are less open. the per capita gross domestic product in the quintile of countries with the most restricted trading was only $1.As the example of sub-Saharan Africa demonstrates. many sub-Saharan African countries have been permitted to retain significantly higher import tariffs than rich countries. the spread of economic openness is building a more peaceful. director of the Center for Trade Policy Studies at Cato. in turn. Domestic producers. reliant on their captive domestic market to keep them afloat. In turn. there is overwhelming evidence that trade openness is a more trustworthy friend of the poor than protectionism. That year’s per capita GDP in the quintile of countries with the freest trading regimes was $23. Beyond our shores. That statistic should be repeated to all those who used the Hong Kong meeting to push for liberalization in rich countries while arguing to protect poor countries’ economies.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade (3) Trade allows consumers to benefit from more efficient production methods. as on so much else. (It is worth noting South African import tariffs are substantially lower than those of other subSaharan African countries. clothing and shoes. Under the World Trade Organization’s “special and differential treatment” rule. had in mind when they urged poor countries to retain their tariff barriers? Trade lowers prices for middle-income families and reduces poverty overseas Griswold.883 in 2002. Lower production costs lead to cheaper goods and services. such as Oxfam. The prices we pay for goods exposed .) Sub-Saharan African share of world exports. see no need to make their products better and cheaper. Result? According to the World Bank.” During difficult economic times. Trade is delivering lower prices and more variety to consumers while creating better-paying jobs for the middle class. which raises real living standards. January 5. rapid growth has almost always led to reduction in poverty. without large markets for goods and services. which measures economic freedom in 123 countries. Few countries have grown rapidly without a simultaneous rapid expansion of trade. Large production runs. large production runs would not be economical . however. 2010. Is that the outcome nongovernmental organizations. The great recession of 2008-09 was not caused by trade. Shoddy goods and services abound throughout the developing world. Africa’s share of world exports declined from 3 percent in 1970 to less than 2 percent in 2003. For example. http://www. but by misguided monetary and housing policies that were “Made in the USA. has been declining despite (or I would argue “because of”) trade protectionism.” According to the Cato Institute’s 2004 report on Economic Freedom of the World. import competition allows more American families to keep their heads above water by delivering lower prices on staples such as food. And the poor suffer the most.

two-thirds of the net new jobs created in the U. truck drivers. Trade benefits producers by allowing Americans to sell our goods and services in growing markets abroad. Between 1981 and 2005. Knock on doors in a typical middle-class neighborhood in southern Florida and you will meet teachers.25 a day dropped by half. the share of the world’s population living on the equivalent of $1. with small and medium-sized companies accounting for almost two-thirds of state exports.S. it is a big lie that we have been surrendering middle-class manufacturing jobs for low-paying service jobs. . For Americans worried about their jobs. insurance and real-estate agents. since 1991. In fact. Florida ranks fifth among states in total value of exports. managers. that have most aggressively opened themselves to the global economy. The imported fresh fruit and vegetables. economy have been in sectors such as health care. Florida companies have been especially successful exporting to Brazil. T-shirts and discounted sneakers sold at big-box retailers are especially important in the budgets of poor and middle-class families. nutrition and literacy. accountants. such as China and Chile. Beyond American shores. computer specialists. education and business and professional services where the average pay is higher than in manufacturing.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade to global trade tend to rise more slowly than inflation or even fall. engineers. from 52 to 25 percent. Mexico and the rest of Latin America. The most dramatic gains against poverty have occurred in those countries. real gains have been made in life expectancy. registered nurses and other health-care professionals and self-employed business owners. infant survival. During this same period. according to the World Bank. the past three decades of expanding trade and globalization have witnessed dramatic global progress. These are the occupations that now form the backbone of the American middle class.

Latin American free trade increases economic growth and solves poverty Gwartney. small government. Indeed. where six Latin American countries — Colombia. we have annually constructed an economic freedom index. That development is particularly unfortunate in a country with no institutional structure to sustain the reforms that were implemented. The situation was much the same in business regulation. Mexico 42nd. The report confirms Adam Smith’s insight that trading partners in rich and poor countries alike can achieve higher income levels through gains from specialization and large-scale production. the sustainability of economic reforms rests largely on the application of the rule of law. The economies of Venezuela. a legal system capable of protecting property rights and enforcing contracts in an even-handed manner is central to both economic freedom and progress. Fujimori fled Peru in the wake of corruption scandals. National Post. As in Peru. April 18. low taxes. Our Economic Freedom of the World: 2001 Annual Report ranks more than 120 countries. and Vásquez. the region’s current instability is more understandable. Yet Latin American countries rank extremely low in both areas.” http://www. As in the past. For the last five years. despite having introduced dramatic reforms a decade ago. then. he left behind a citizenry that mistakenly attributes lackluster economic performance to market reforms. The present rise of populist. Argentina has only gone partially down the path of economic freedom. Chile (tied for 16th with Germany) was the highest ranked Latin American country. Seven of the 10 lowest rated countries in the legal area — El Salvador. secure property rights and free trade). Ukraine. Bolivia. For instance. 2001. United Kingdom.cato. Given the Andean countries’ prominence on the lower end of these rankings. sound money. Likewise. and Brazil 55th. as did several Latin American countries that privatized enterprises. Chile was the only Latin American nation in the upper half in either of these two areas. and Russia were the least free among the 58. Its regulatory environment continues to discourage economic growth and job creation.1990s.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Latin America Specifically. director of the Cato Institute’s Center for Global Liberty and Prosperity. But Peru’s judicial system and the rule of law remained weak during Alberto Fujimori’s personalist. “Why Latin America Needs a Free-Trade Zone. Ecuador and Peru — were Latin American. The freedom to compete in business is also central to economic progress. New Zealand. Venezuela. For example. which rates countries’ policies against free-market principles (for example. sustained economic progress depends upon sound policies and institutions. For example. 1 (James and Ian. Colombia. Mexico and Venezuela — ranked in the bottom 10. Argentina ranked 30th. the country’s Mussolini-inspired labour regulations are completely out of step with a modern . Argentina’s political system lost interest in liberalization by the mid. left-wing candidates as leading contenders for the presidency should not surprise us. Ecuador. United States. Bolivia. lowered trade barriers and removed investment restrictions. KR) Yet. professor of economics at FSU. Ireland and Canada. Among the 58 countries in our comprehensive index. This year’s report also includes a more comprehensive index for a smaller set of 58 nations for which we could obtain more detailed data.org/publications/commentary/why-latin-america-needs-freetrade-zone. more than ever before. When Mr. Mexico. Argentina. Hong Kong was rated the most economically free jurisdiction in the world. 10-year rule. Peru moved swiftly toward the free market in the early 1990s. Our index helps explain some of Latin America’s maladies. followed by Singapore. Free economies have indeed grown more rapidly and achieved higher income levels than less free economies.

Here. This potential exodus constrains the actions of political leaders. The relationship between openness and sound policies is no coincidence. raise the cost of hiring workers.’ A Free Trade Area of the Americas will thus discourage bad policies in a region where growth continues to be stifled by a legal and regulatory environment that is prone to play favourites. political leaders have a strong incentive to follow sensible policies. When both trade and capital are free to come and go. and are directly responsible for Argentina’s chronically high unemployment rate of 14%. Indeed. both entrepreneurship and investment capital will flee countries that insist on imposing high taxes. restrictive regulations and inflationary monetary policy. 7% growth has allowed Chile to reduce its poverty rate from 45% to 22%. lack of reform has produced diminishing returns and pushed the country toward crisis. and impose a heavy regulatory burden. A hemispheric free trade zone would provide indirect benefits that go beyond immediate increases in growth and prosperity because trade openness makes the pursuit of unsound policies costly. the region is far better off now than during the inward-looking policies of the lost decade of the 1980s. Still. When economies are open. for example. . too. Latin America’s gains in economic freedom have increased growth and lowered poverty levels. protect existing firms.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade economy. Hong Kong and Singapore show that openness and economic freedom are complementary. the two jurisdictions are the most open and most free economies in the world. refers to as a ‘golden straitjacket. It imposes what Thomas Friedman. in The Lexus and the Olive Tree. From 1987 to 1998.

and vice versa. The poor countries are poor because countries like the U. poker. 2 (Daniel. In these games. director of the Center for Trade Policy Studies at Cato. Cato Institute. and basketball. on less than $1 per day—has fallen since 1978 by 200 million. . Rich countries exploit the poor labor and weak regulations of poorer countries.S. sub-Saharan Africa and South Asia. It’s a zero-sum.heritage. though. When the Celtics and the Bulls compete.org/publications/commentary/seven-moral-arguments-free-trade. trade and investment sanctions. would set¶ back one of the most successful anti-poverty programs in the history of mankind. By the millions. Political rulers have the power to protect their pampered lifestyles.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Income Inequality Free trade disperses wealth and undermines elites-China proves Griswold.” But the false assumption behind these charges is the “zero-sum game myth. “Seven Moral Arguments for Free Trade”.S. catered meals and chauffeur-driven cars while the millions of poor people they oppress are made even more miserable by U. while the poor are left to suffer the consequences of U. trade sanctions fall heaviest on the poor of the target nation.org/research/reports/2010/06/the-economy-hits-home-internationaltrade. badminton. then the Bulls are down. Revoking China’s normal trade status. http://www. 10 (Jay. 2002. For all these reasons. are rich. The scales balance. inland locations. In¶ contrast. they seek to leave closed and centrally controlled economies for those that are more open and less controlled. The most recent Economic Freedom of the World study.S. Free trade doesn’t cause exploitation-it’s not a zero-sum game Richards. which no one wants to play). Heritage Foundation. By dispersing economic power more widely. Besides win/lose games (and lose/lose games. if the Celtics are up. “The Economy Hits Home: International Trade”. but everyone ends up better off than they were at the beginning. 2010. among all its other negative consequences. No one simply loses. checkers. KR) We’ve all heard the charges against free trade: “The rich get richer. free trade and free markets undercut the ability of elites in less developed countries to pillage a nation’s resources at the expense of its poor. the poor get poorer. found that the nations that were most open economically from 1980 through 1998 grew nearly five times faster than those that were most closed. policies that were enacted in the name of helping the very people they victimize. KR) Free trade and free markets empower poor people by giving them greater opportunity to create wealth and support their families. for instance. there are positive-sum or win/win games. just as cities along coastlines and navigable rivers tend to be wealthier than those in more remote. Nations open to trade tend to be more prosperous. those regions of the world where poverty has been the most intractable. You can be sure that the communist leaders in Cuba and the ruling junta in Burma will continue to enjoy their fine. the World Bank estimates that the number of Chinese citizens living in absolute poverty—that is. Senior Fellow at the Discovery Institute. Poor people themselves understand that a free economy serves their interests.” A zero-sum game is a win/lose game like chess. have been the least open to trade and foreign investment. To cite the most dramatic example of this. some players may end up better off than others. by James Gwartney and Robert Lawson. Proof can be found in the immigration patterns of poor people throughout the world. And that trade-related growth lifts the lot of the poor. May 11. http://www.cato. even if many of their selfappointed intellectual advocates in the West do not.

was recently released by a consortium of think tanks. By 1990. tied for 38th with six other nations including France and South Korea. positive-sum scenario. Chile. To score highly on this index. The rankings of other major economies are the United Kingdom (4th).. sound property rights and legal system. Worldwide. a nation should have low government spending and taxes. life expectancy. statistics on infant mortality. FREE TRADE is an exchange of goods or services in which both sides of the trade freely engage without interference by the government or other parties. not the government or central plan.[2] In fact. Three former communist countries are in the bottom 10: Russia (116th). The study also shows that economic freedom is strongly linked with both higher levels of income and faster rates of economic growth.S. but the lives of billions of the poor have improved as well. and poverty have improved in the last few decades. KR) A new study. Things Have Gotten Better. Not Worse The benefits of free trade aren’t just theoretical. And (unless you were holding your barber at gunpoint) presumably she’d rather have the $10 than the time and energy it takes to cut your hair. and 38 percent (1. This publication. with a world population of 5. Japan (24th) Taiwan (30th). Ukraine (119th). including those that are poor compared to the U. The most economically free nation in the world remains Hong Kong followed by Singapore and the United States. As international trade has expanded over the last 30 years.cato. Economic Freedom Needed To Alleviate Poverty Around The World. July 3. The exceptions have been countries with extremely corrupt and despotic governments and countries that have suffered civil war. the world population was 3.4 billion) lived below the absolute poverty line. 2 (Robert.e. in which no one is forced or tricked into participating) is a win/win. presumably you’d rather have the haircut than the $10. France (38th).org/publications/commentary/economic-freedom-needed-alleviate-povertyaround-world.[3] Although it is tragic that there are still people languishing in poverty. the percentage languishing in absolute poverty dropped to 26 percent (still about 1. professor of economics at Capital University. Mexico (66th).Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade An exchange in which both sides freely engage (i. income per person and the average life expectancy have gone up in most countries. http://www. So you both see yourselves as better off as a result of the trade: It’s win/win. 2002. Neither party is prevented from trading. presents an economic freedom index for 123 countries. nor forced or tricked into trading. Economic Freedom of the World: 2002 Annual Report. which includes the Cato Institute in the United States. Economic freedom means that each individual plays the primary role in his economic life. and India (73rd). Canada (8th). Germany (15th). Think about how this happens in everyday life. In 1970. even in the poor parts of the world. liberal trade policies. the percentage of people living in absolute poverty—those with an income of less than $1 a day—has dropped since 1970. this index measures the degree to which nations are pursing policies consistent with economic freedom or market capitalism. and Romania (114th) all did worse than communist China (101st). with the best record in Latin America. and few government regulations. Free trade solves poverty and boosts growth-it increases average income and has no correlation with income inequality Lawson. sound money. Cato. Based on 37 data components drawn from a multitude of sources. things have not gotten worse overall. Most of the lowest ranked nations are in Africa and Latin America. Data for North Korea and Cuba are not available. Botswana has the best record for an African nation.7 billion.3 billion. co-authored by James Gwartney and myself. If you give your barber $10 for a haircut. The people living in the top one-fifth of . was tied with three other nations at 15th.4 billion). The rich may have gotten richer.

556 and a -0.¶ Clamoring to stop this wave of economic progress carried forward by technology and innovation is akin to arguing that the United States. By breaking the cycle of poverty. The poorest 10% of the population have an average income of just $728 in the least free countries compared with over $7000 in the most free countries.¶ The Industrial Revolution brought freedom of movement and increased opportunity to all economic levels of society. But poor people are much better off with economic freedom. poor country. the opponents of free trade will continue to espouse the old argument that "the jobs created by globalization are often less sustaining and secure than the livelihoods abolished by it [in poor countries].56 percent per year. That economic freedom leads to more and faster wealth creation is no longer a controversial argument. http://www.85 percent growth rate in the 1990s. And although history suggests that this new era of market globalization may well be accompanied by new problems for which the solutions once again will lie in the power of human ingenuity and innovation. it is much better to be poor in a free. KR) Societies that enact free trade policies create their own economic dynamism--fostering a wellspring of freedom.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade the most free countries enjoy an average income of $23. Heritage. 2k (Denise. “The Benefits of Free Trade: A Guide For Policymakers”. rich country than an unfree. and prosperity that benefits every citizen. for the majority of the population that did not enjoy such luxury. While one might argue that this was true of the white male members of the landed classes (although even then such a claim is dubious). 2000. the poor gain a lot from economic freedom. The share of income going to the poorest 10% of the population is completely unrelated to economic freedom. In recent years. Nor are American citizens alone in benefiting from those free trade policies that the U. enacts. But what of the argument that market capitalism leaves the poor behind? In fact. America's free trade policies can enable even the most impoverished countries to begin to create their own dynamic toward prosperity.org/research/reports/2000/08/the-benefits-of-free-trade-a-guide-forpolicymakers. to cite just one example.¶ Nevertheless. Trade solves poverty-exploitation is non-unique-only trade allows social mobility and facilitates democratic transition Froning. Free people live longer too.S.heritage. the bottom one-fifth in the rankings had an average income of just $2. in contrast. quality of life has improved immeasurably. despite all the evidence to the contrary. August 25."33 Such a claim presupposes that some sort of agrarian utopia previously existed in these countries and that their peoples will not reap the benefits of economic development. Simply put.450 and a growth rate in the 1990s of 2. The life expectancy of people living in the most free nations is fully 20 years longer than for people in the least free countries. opportunity. the United States has demonstrated the power of this principle. This is quite literally the difference between knowing your grandchildren or not. it also presents an unprecedented level of opportunity for people to achieve economic freedom and greater prosperity. . was better off before the Industrial Revolution. Heritage Foundation analyst. It also set the stage for social and democratic progress of a magnitude that would have been impossible earlier.

and at the same time made progress against poverty. the work of David Dollar and Aart Kraay (2002) notes that. most of them have made progress against poverty. but the tariff on imported synthetic or low grade cotton is higher. “Making the Case for Free Trade. In fact. The highest trade barriers remaining in the United States are aimed at products that are disproportionately consumed by poor people at home and produced by poor people abroad. came down firmly on the side of trade being a friend of the poor. KR) Nonetheless. professor at Columbia and Srinivasan. 10/30/2004.000 a year pays an effective tariff on the goods she consumes that’s three times higher than what a single executive earning $100. while critical of a lot of things in the global economy. Our existing trade barriers are biased against the poor at home. Trade solves poverty-China and India prove Bhagwati. And by the way. virtually all that progress has happened in poor countries that have progressively globalized. Those that follow the teachings of the anti globalization people have made no progress. This study calculated that a single mother with two children earning $20. Furthermore. we could deliver twice as much income to poor countries as all the aid we give them.S. professor at Yale. and that share is expected to continue to fall. May 2002.” How about the world’s poor? Here’s a headline you probably didn’t see in your local newspaper:” Global Poverty Down by Half Since 1981. there is very little progress. the tariff on imported silk underwear into the United States is virtually zero.org/publications/speeches/making-case-free-trade. A moderate Democratic think tank in Washington called the Progressive Policy Institute issued a study in 2004 that documented that U. if one classifies . you pay a high tariff. “Trade and Poverty in the Poor Countries”. The evidence on trade and poverty became so overwhelming that Oxfam International issue a study in 2002 that.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Empirically True Trade solves poverty-it decreases marginal costs for the poor-history is on our side Griswold. 2 (JAGDISH BHAGWATI AND T.000 a year would pay. So if you wear silk underwear. Our highest trade barriers are on farm products. N. 92 No.” The Share of the world’s population living on dollar a day or less has dropped from 40 percent then to 20 percent today. AEA Papers and Proceedings. In other words. tariffs are much higher on low-end goods than high-end goods. The World Bank could not find a single example of a poor country that had kept its markets closed and chased away foreign investment.” http://www.cato. you get a low tariff. director of the Center for Trade Policy Studies at Cato. For example. all the poor countries that followed our example. accessed 6/30/13. Feuds over Free Trade. And they pointed out that by getting rid of these rich-country trade barriers. Vol. KR) Another area of positive terrain for us that we shouldn’t give up is the poor and the world’s children. the number of poor is rising in those places. SRINIVASAN*. But not on the kind you would buy in a Gucci store. Places like Sub Saharan Africa. it is interesting that practically no country that has been close to autarkic has managed to sustain a high growth performance over a sustained period. on textiles and apparel and shoes. 2. And not just all shoes. We have our highest trade barriers on low end shoes. A trade representative in Washington likes to say that our goal should “to make sure that every discount store in America is a duty free shop for working families . If you wear the regular kind of underwear like the rest of us. the kind you would buy in a Pay Less Shoe Store. 4 (Daniel.

Nonetheless. and no one cause will ever explain big outcomes like growth. citing Hong Kong and Chile as readily powerful examples. I want to assert and defend one general principle about poor nations. Indeed. Capitalism Institute “Does Free Trade Hurt Developing Economies?” http://www. is salutory.capitalisminstitute.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade countries into globalizers and nonglobalizers by reference to their relative performance in raising the trade share in GNP during 1977–1997. of all the nations in the world. real GDP grew at an annual average rate of 10 percent in China and 6 percent in India during these two decades. declined from 28 percent in 1978 to 9 percent in 1998. it will save you a . no date (Jason. thereby actually increasing wealth in both nations. in order to inform those unfamiliar with the transforming power of free trade and to encourage those who already agree with this notion. and fewer than ten countries exceeded the Indian growth rate. accessed 6/30/13. like success. Therefore. I asserted that free trade is the only way that poor countries can ever hope to rise out of their poverty. The effect on reduction in poverty in both countries was dramatic. In fact. that’s where most students (and professors) present their “intellectual” doubts about the merits of free trade. by standard measures. According to World Bank (2000 table 4-2) estimates. according to the Asian Development Bank (2000 table 3-1) estimates. has many fathers.org/does-free-tradehurt-developing-economies/. I mentioned that trade is a mutually beneficial endeavor in which the parties of both nations benefit through voluntary transaction. KR) That’s when I decided it was time to say something. By the Government of India’s (2000 table 5) estimates. other economies such as Vietnam and Uganda have had similar experiences. the many reasons why autarky would put a country behind make these empirical observations quite salient. I asserted that history has proven this to be the case. Dollar (2001 p. in the previous three decades (1950– 1980) India’s autarkic policies alongside other damaging policies (such as extreme interventionism and controls and proliferation of an inefficient public sector in economic activity well beyond utilities)9 were associated with an annual growth rate of only 3. Capitalism Institute staff writer. treating such integration as an opportunity rather than as a threat. Obviously. The vast majority of the world’s poor live in the rural areas of these two countries. poverty incidence fell from 51 percent in 1977– 1978 to 27 percent in 1999–2000. with the natural consequence that the incidence of poverty fluctuated around 55 percent with no declining trend.5 percent. If you keep this one thought with you as you learn about free trade and international markets. No country in the world had as rapid growth as China.7 The evidence on growth and poverty is best approached through focus on the two countries: China and India. In short. 17) argues that the only developing countries that have registered significant declines in poverty are those that also have integrated faster into the world economy on the dimensions of trade and direct investment. Both countries achieved significant reductions in poverty during 1980–2000 when they grew rapidly. we should be most ready to agree that free trade most helps the poor. the experience of the two giant economies of China and India in achieving faster growth and reduction in poverty through greater integration into the world economy. Failure. the incidence of poverty in China. And yet. the former group has shown higher growth rates.8 It is also relevant that these were also the decades in which both China and India increased their integration into the world economy.10 Free trade solves poverty-history proves Hughey. Thus. entirely in keeping with the “Bhagwati hypothesis” of the early 1960’s that growth is a principal driver of poverty reduction. The opponents of trade who allege that it accentuates or bypasses poverty are therefore not credible. According to Dollar (2001).

Poor nations are poor because of government intervention. or that changing a flag means that trade is not beneficial. disregarding the true sources of sustainable development as grounded in free trade.” in The Revolution in Development Economics. 208). . in both scenarios. 208-209). as governments accumulated whatever material wealth there was to be had. p. The Third World’s War against Free Trade Doug Bandow (1996) observed that. so she accepts Kirk’s offer. But an article on regulations by the governments of rich nations can be left for another time. Thus. foreign aid was pumped into these governments to encourage their economic growth as quickly as possible. “Unfortunately. 209).Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade boatload time and effort when faced with the absurd proposition that free trade brutalizes poor nations. makes absolutely no sense. the mutually beneficial action of voluntary trade between individuals of different nations is disrupted by the controlling force of an intervening state actor. I will only consider poor nations whose governments disallow trade by taking control of their economies. or 2) the governments of poor countries refuse to allow trade with rich countries. Notice that. Unfortunately. p. Nor does it change when Kirk’s company is South African and Kelly’s company is Japanese. what really hurts poor countries? There are only one of two options that we can consider. As Bandow noted in the same essay. Of course. honest effort. As Bandow noted. “control of the economic system helped assure continued political domination for ruling groups” (Bandow. domestic subsidies and tariffs that act to discourage Americans from importing cheaper and better products from many poorer nations. “Western officials encouraged ambitious leaders of small countries to drag their peoples into the industrial age as quickly as possible” (1996. war. It is not trade that is harmful. intellectuals and politicians condemned free trade as the source of evil in these countries. Trade occurs when Kirk wants what Kelly has while Kelly wants something in return. Thus. p. believed that true independence required indigenous control of economic resources” (“The First World’s Misbegotten Economic Legacy to the Third World. They experienced the reality of a life in which their government could literally steal whatever they owned while forbidding them to trade their goods and services to foreigners for a profit. The decision was in part nationalistic: African state. To argue that adding more people to the mix. leaving people in both countries worse off. Meanwhile. most Third World states traveled the socialist path. this movement to collectivize the economies of Third World countries turned out to be a highly beneficial trade-off for the governing officials of these nations. service. For the purposes of this article. and voluntary exchange? Simaltaneously. As a result. but also instability. in particular. but it condemned their citizens to a wretched existence. In the midst of these proposals. even though such a solution would have permitted foreign investors and multi-national corporations to create jobs and provide for true economic development in these countries.S. but the lack of trade caused by governments that keep poor countries in their wretched poverty. these central planners called for the corrupt socialist governments of Third World nations to bring about economic development. and crushing misery. and succumbed to the tyranny of their political overlords. leaving people in both countries worse off. poor people struggled. as decolonization quickened after World War II. Kelly perceives the trade as beneficial to herself. trade is not the culprit: 1) Either the governments of rich countries refuse to allow trade with poor countries. absent were recommendations that encouraged free trade. 1996. and in both of them. both are more pleased about their material situation than they were prior to the trade. Kirk offers Kelly something of his own (either an item. what else are people to do when they can’t improve their wellbeing through peaceful production. but someone could easily point to many U. 1998. in the West. The Nature of Trade and its Benefits Very simply. Even beyond this absurdity. The result of such tight-fisted regulation was not only poverty. sickness. consider what trade is on an individual level. starved. After all. or money). Does this change when Kirk is from Sweden and Kelly is from Canada? Of course not.

and countless other things help determine what advantage one country has over another in the global marketplace. a highly skilled workforce. and fosters economic development in poor countries. we would all be much worse off. no doubt. the poor individuals within them were doomed to economic failure—not because of trade. or fill teeth. http://www. KR) Freer Trade enables more goods and services to reach American consumers at lower prices. but because of the lack of it. and short. Research Data Specialist. while Norway has an advantage in North Atlantic fishing. brutish. In the long run. roughly 500 million people have been lifted from poverty largely as a result of freer Trade and market reforms. has a comparative advantage over Norway in growing grapes and fermenting wine. harvest cotton and loom it into fabric to make our clothing. feed and milk our own cows.heritage. 2006. Free Trade helps to spread freedom globally. Specialization of labor within a city or a country leads to greater prosperity for all. Instead. Senior Analyst in Trade Policy and Kim. rather than pretending they don’t exist.heritage. April 18. Moreover. Life would be nasty. Senior Fellow at the Discovery Institute. reattach retinas. KR) Free trade benefits everyone because it allows partners to capitalize on their unique capacities and resources.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Thus. giving families more income to save or spend on other goods and services. http://www.org/research/reports/2010/06/the-economy-hits-home-internationaltrade. more diverse products Richards. and learn to do double bypass surgery. In the long run. Heritage Foundation. If each of us had to grow our own wheat. cultural heritage. Attempts to equalize those differences in the name of “fairness” simply prevent countries from benefiting from free trade.[9] Trade is good for everyone-specialization of labor promotes better. over the past 25 years. climate conditions. free trade is fair trade. build our own houses. Access to capital. The World Bank reports that in the 1990s. the benefits of free Trade extend well beyond American households. reinforces the rule of law. “Free Trade and American Prosperity”. and the French are probably better off buying cod from Norway. 2010. 6 (Daniella and Anthony. . Norwegians are probably better off buying much of their wine from France than trying to grow grapes and make all their wine themselves. what economists call their comparative advantage. per capita real income grew three times faster in developing countries that lowered Trade barriers than in developing countries that did not do so. France. ¶ The same dynamic holds for the international arena. everyone is better off. “The Economy Hits Home: International Trade”.org/research/reports/2006/04/free-trade-and-american-prosperity. when we focus on what we do best and then trade freely for everything else. 10 (Jay. free trade is fair trade.¶ Free trade is fair when countries with different advantages trade and capitalize on those differences. In fact. Free trade empirically solves poverty Markheim. for the sake of upholding the corrupt governments of these Third World nations.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Good .Environment .

writer for e-International Relations. it has further led to the emergence of global concerns – one such concern being the environment. The Convention on Biological Diversity (CBD) (1992) similarly affirms that “the conservation of biological diversity is a common concern of humankind”. Concern over the environment is partly driven by the argument that the environment is a common concern of all nations. free traders argue that trade liberalization is good for the environment. March 15. http://www. Trade Liberalization is bad for the environment Environmentalists argue that trade liberalization is bad for the environment. This is seen in the argument that developed countries are ‘greener’ than developing countries and often argue for the inclusion of environmental protection measures in trade relations[3].eir.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Sustainability Free trade encourages efficiencies that ensure environmental sustainability Spence. Economic globalization has not only led to the liberalization of international trade. Climate change and the loss of biological diversity being the “common concern of humankind” have led to the argument that each country in the global community has a role in alleviating these problems. 11 *Marvin. has sparked a debate between free traders and environmentalists about how trade liberalization affects the environment. The environment being viewed as the common concern of all nations is evident in the Climate Change Convention (1994) which acknowledges that “change in the earth’s climate and its adverse effects are a common concern of humankind”. These were issues that were not covered by the GATT 1947. accessed 6-30-13 BLE] With the liberalization of international trade in the latter part of the twentieth century. in some instances. 2011. as it has led to countries with lax environmental standards. manufacturing. having a comparative advantage in the global marketplace. While environmentalists argue that trade liberalization is bad for the environment. “Trade Liberalization and Environmental Protection”. . there was the need for an institution to regulate this trade. Developed countries assuming the bulk of the responsibility is due to the argument that they are largely responsible for. and as such each nation should strive towards alleviating environmental problems. the principle of ‘common but differential responsibility’ stipulates that developed countries should assume a greater responsibility in alleviating these problems than developing countries. This debate may also be interpreted as one between developed and developing countries. and brought new international rules to govern trade in agriculture. This was especially seen as necessary since the GATT 1947[1] did not have rules to govern issues such as services. The WTO emerged out of the Uruguay Round of trade negotiations (1986-1994). The establishment of the World Trade Organization (WTO) was seen as the answer to the wave of liberalization brought by economic globalization. and they are better able to alleviate these problems. Despite the view that each state must assume responsibility for global environmental problems. Concern over the environment is also driven by the argument that trade liberalization negatively affects the environment.info/2011/03/15/trade-liberalization-and-environmental-protection/. The Climate Change Convention further recognizes that “the specific needs and special circumstances of developing country Parties…that would have to bear a disproportionate or abnormal burden under the Convention”*2+ should be given full consideration. services and intellectual property. Evidence of this is seen in the Climate Change Convention which notes that “the largest share of historical and current global emissions of greenhouse gases has originated in developed countries”. This argument is linked to the pollution-haven hypothesis. Trade – Environment Debate The importance attached to trade liberalization and the environment.

This was one issue that compounded the debate over the North American Free Trade Agreement[4] (NAFTA). there will be more skillful management of resources and more forceful demands on governments to pass and enforce stringent environmental policies (Anderson 1996). The Panel interpreted GATT Article XX(g) as only permitting measures aimed at resource conservation within the jurisdiction of the enacting country (Condon 2006). Evidence of this is seen in GATT Article XX(e) which allows Members of the World Trade Organization (WTO). Esty 1994). The Multilateral Trading System and Environmental Protection In an effort to appease the concerns of environmentalists various . is likely to result in increased pollution and unsustainable consumption of natural resources (Brack 1995). it will further aid in the environmental degradation of the country with the lax environmental standards. it is further believed. there is a school of thought that identifies trade liberalization as being good for the environment. Supporters of trade liberalization further argue that the opening up of markets will lead to rising incomes and an increased demand for education. The relocation of these industries will not only negatively affect the country with the high environmental standard. This. they argue that lax environmental regulations in one jurisdiction will give credence to business arguments about competitive disadvantage in another jurisdiction (Esty 1994). Environmentalists not only believe that trade liberalization will lead to industries relocating to ‘pollution-havens’. This explores the issue of extraterritoriality and raises the important question: Does a Country A has the right to infringe on the sovereignty of a Country B. has also led to the argument that it is good for the environment. This will reduce the possible negative impact on the environment from the unsustainable utilization of natural resources. It was argued by the Panel that other provisions in Article XX (General Exceptions) did not exclude measures aimed at actions outside a Contracting Party’s territorial jurisdiction. as countries with high environmental standards will impose sanctions on countries with low environmental standards causing them to improve their environmental standards. It is also argued that trade liberalization will improve environmental standards. by telling that state how to manage its own environment? In Tuna-Dolphin I (1991)[5] the GATT Panel ruled that a state could not violate the sovereignty of another state by telling that state how to manage its own environment. Zhang (2003) attests to this as he states that open markets may “stimulate social progress as contact among societies leads to the sharing of new ideas. will lead to countries lowering their environmental standards or maintaining lax environmental standards to appease business interests. would cause greater depletion of natural resources and worsen pollution (Schatan 2000). North American environmentalists held that higher level of economic activity in Mexico. It is believed that with more income and education. The Tuna-Dolphin II (1994)[6] Panel however. rejected the view that Article XX(g) limited the location of the resources in question.S argument that it had not ceded national authority to the GATT to adopt international environmental policies unilaterally. accompanied by lax environmental enforcement. [and] more rapid diffusion of technological advances” (Zhang 2003: 117). to block the importation of goods relating to prison labour. Trade liberalization being associated with the transfer of ‘environmentally friendly’ technology.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade which suggests that trade liberalization allows firms to take advantage of cross-country differences on environmental regulations. The growth in economic activity that trade liberalization causes. subject to various requirements. and that falling trade barriers induces pollutionintensive industries to relocate to countries with weaker environmental regulations (Zhang and Yang 2007. Trade Liberalization is good for the environment Despite the view that trade liberalization is bad for the environment. The Panels decision was further influenced by the U. it is believed. With the liberalization of trade it is believed that countries will utilize their comparative advantage and specialize in the production of goods and services in which they are most efficient (Brack 1995).

because it induces the emergence of "pollution-havens"—Third World nations that take on the dirty work of tanning leather. Prior to the Uruguay Round. the result is that pollution (as measured by sulfur dioxide concentrations) falls by one percent. 02 *Daniel. and (iii) the production techniques used. In other words. . But the third effect— changes in production techniques—swamps the other forces. http://perc. This is evident within the Preamble of the Marrakesh Agreement*8+. total environmental damage also increases. Copeland. the Preamble of the Marrakesh Agreement underlined the importance of interpreting trade commitments within the context of ‘sustainable development’. on the other hand. has a modest adverse impact on environmental quality. and Taylor 2001). The conclusion of the Uruguay Round led to the Multilateral Trading System being ‘greener’ on paper. once these measures do not constitute a disguised restriction on international trade. Antweiler et al. With the conclusion of the Uruguay Round of negotiations (1986-1994) there were significant developments to the environmental provisions of the multilateral trading system. it is claimed.org/articles/freetrade-good-environment. where it is noted that there should be “optimal use of the world’s resources in accordance with the objectives of sustainable development”. making paper. trade can have an impact on environmental quality through three channels. are able to distinguish the effects of each of these on environmental quality. GATT Article XX[7] (General Exceptions) was the only Article in GATT 1947 that addressed the issue of environmental protection. and the like. Unlike the Preamble of GATT 1947. Free trade good for the environment—production techniques Benjamin. The fact that freer trade induces increases in the scale of economic activity. Overall. The links between trade and the environment are subtle and complicated. but the contention that trade harms the environment is difficult to assess systematically. environmental protection under the GATT came in the form of an exception. Senior Fellow at the Property and Environment Research Center. (ii) the scale of economic activity. the authors estimate that for each one percent that freer trade raises per capita income in a nation. These are changes in (i) where goods are produced. which ‘allowed’ for the “full use of the resources of the world”. Whether it is between people. and simply measuring such concepts in a convincing way is daunting. states. These nations become polluted and. the economic development brought by trade liberalization was not supposed to cause irreversible damage to the environment. They protest that international trade is environmentally destructive. or nations. and it is environmentally beneficial. Spring 2002. Interestingly. Recent research has made huge strides in cracking this problem and provides us with a compelling conclusion: Freer international trade improves the environment (Antweiler. not harmful.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade innovations have been made to the multilateral trading system. “Is Free Trade Good for the Environment?”. Paragraph (g) of GATT Article XX allows WTO Members to adopt measures aimed at the conservation of exhaustible natural resources. Many economists are skeptical of the pollution-haven story. changes in the location of production—the pollution-haven hypothesis—turn out to be empirically unimportant. accessed 6-30-13 BLE] Rock-throwers at World Trade Organization meetings call themselves environmentalists.

writer for the New York Times. “Contrary to some . The result should be more-efficient markets and more opportunities for technological and economic development in the developing world. developing countries often must acquiesce to the demands of their developed trade partners in order to acquire market access. to broker a long-awaited deal as part of the so-called Doha round of trade talks. http://green. 7). encourage technology transfer. “Does Free Trade Help or Hurt the Climate?”. Differences of opinion remain. it also needs specific policies that build up domestic industries and institutions in order to be globally competitive.pdf.com/assets/pdf/Free_Trade_Thrasher.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free trade creates more efficient markets—helps the environment Thrasher. Researcher at the Pardee Center for the Study of the Longer-Range Future. responding to the pressures of environmental interest groups. But the developed world. 2011. accessed 6-30-13 BLE] The principle of sustainable development has become a priority in global trade negotiations.berkshirepublishing. As countries continue to remove trade barriers. maintains that environmental protection must accompany poverty reduction and economic development. when combined with environmental awareness. global competition in all sectors should increase. For low-income nations. Since poverty has been identified as a primary cause of environmental destruction.nytimes. “Free Trade”. Those are the conclusions in a report issued on Friday by the World Trade Organization and the United Nations Environment Program. 09 *James. however. Growth and Change The theory behind trade liberalization. however. and “generate the resources they need to protect the environment” (WTO 2006. true economic development from free trade could have a positive effect on the environment in the future. Many argue that while the developing world needs market access to enter the world economy. Some WTO members recognize that environmental commitments must consider developing countries’ capacity to embrace and enforce those commitments.O. But more trade could also help to stop climate change by increasing the availability of climate-friendly technologies and products.blogs.T. The primary controversy concerns the capabilities of developing nations to conform to the environmental commitments demanded by the developed world. http://www. 11 *Rachel Danae. over the specific methods of promoting such development and which pillar of sustainability should take precedence. writer for the New York Times. The report seemed aimed partly at defending continuing efforts by the W. accessed 7-1-13 BLE] Making trade more free could lead to a rise in carbon-dioxide emissions as a result of greater economic activity. shows promise despite the antagonistic relationship between free trade and sustainability.com/2009/06/26/does-free-trade-help-or-hurt-theclimate/?_r=0. June 26. Boston University. Outside multilateral trade negotiations. Efficient markets could allow environmentally friendly technology to transfer across borders. 2009. reducing poverty is the main priority. Trade helps the environment—clean technology spread and environmentally friendly tariffs Kanter. These policies could provide developing countries with the flexibility to control the movement of capital.

and Achim Steiner.edu/economics/Themes/ubben. As long as environmental quality is taken into consideration when resources are allocated.uni. can be instrumental in developing sustainable agriculture practices and reducing soil erosion in lesser-developed countries [Zilberman. Such “border adjustment measures.N. program. Finally. Trade also encourages environmentally sustainable use. the director-general of the W. New taxes and tariffs could be imposed by countries like the United States and by trade blocs like the European Union to protect home industries and keep out products made more cheaply. 1998. Trade liberalization may also serve to break down exchange rate policies that subsidize the importation of chemicals. It can be argued that the efficient allocation of resources is a step toward environmentally sustainable development [Brack.” the two groups said in a statement that accompanied the report. free trade could reduce chemical usage and lead to environmental improvement [Antel.T.” The report also tackled a principal threat to free trade in climate regulations. Trade . and the Necessity of Intervention”. trade can be argued to be a key factor in the increase in environmental standards and increase the speed with which developing countries reach the environmental stage because it serves to increase income [Brack.pdf. the transfer of farming practices such as crop rotation and low till or no till farming. 2004. 14]. constitute “a complementary track towards reducing greenhouse gas emissions to scientifically-defensible levels. trade that promotes efficiency will benefit the environment. than there are no other allocation of resources that could make one group better off without hurting any other group. according to the statement.. the agencies suggested. and in less environmentally sensitive ways. such as predator organisms and genetically developed crops resistant to disease and insects.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade claims. If an allocation is Pareto optimal.. in theory.” as they are called in trade jargon. Efficiency allows a country to maximize its output for a given level of resources. would represent a new set of trade barriers and could trigger a spate of litigation. 1992. To bolster their case. Trade liberalization can improve resource allocation by allowing countries to specialize in the production of goods and services in which they are most efficient.O. 04 [John R. Hence. can reduce the dependence on chemicals. in other parts of the world. Trade liberalization can help improve resource allocation by removing inefficient prices. the executive director of the U. said any forthcoming trade deal should include measures to free up trade in environmental goods and services. 1. economics professor at the University of Northern Iowa. 1145]. then. accessed 7-2-13 BLE] How might trade liberalization help the environment? Trade liberalization can benefit the environment in a number of ways. “Trade Liberalization and Environmental Quality: Opposing Viewpoints. Trade liberalization can also help improve the efficiency of resource allocation by removing inefficient prices and subsidies. Pascal Lamy. Additional Issues. 1]. trade and trade opening can have a positive impact on emissions of greenhouse gases in a variety of ways including accelerating the transfer of clean technology and the opportunity for developing economies to adapt those technologies to local circumstances . Trade is good for the environment—efficient allocation of resources causes environmental sustainability Ubben. Those measures would. 784]. In the area of biotechnology. 1993. In agriculture. 1998. http://business. Free trade can promote the transfer of genetic material and technology that can improve agricultural development and environmental protection in the form of a reduction in chemical use. the transfer of biological pest controls.

1994. Companies who produce goods for export face a number of different standards. Our approach. Ph. 1993.25-1. August 1998. Increased income creates potential for investment in environmental protection and may also speed up the transition from purely economic concerns to a balance of environmental and economic growth for developing countries [Antel. then pollution concentrations fall by about I percent. regardless of its effect on pollution control or environmental protection efforts” *GATT Secretariat. professor at University of British Columbia.D. However. and many other factors [Brack. 'Hits distinction is important for many reasons? Grossman and Krueger (1993) interpret their hump-shaped “Kuznets curve" as reflecting the relative strength of scale versus technique effects. and hence the pollution intensity.5 percent via a technique effect. 787]. we are able to distinguish empirically between the negative environmental consequences of scalar increases in economic activity the scale effect--and the positive environmental consequences of increases in income that call for cleaner production methods-the technique effect. Esty. although relatively straightforward. is novel in four respects. Copeland. some higher than others. First. but the accompanying increase in income drives concentrations down by 1.5 percent for an average country in our sample. this link is not automatic and policies will need to be implemented to ensure environmental concerns are pursued simultaneously. Free trade is good for the environment Antweiler et al. so when the company looks to expand into new markets it will have the advantage of already complying with standards regarding the environment. labeling. but they do not provide separate estimates of their magnitude. The National Bureau of Economic Research.org/papers/w6707.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade can also serve to increase environmental standards in the manufacturing sector. . 14]. accessed 7-1-13. We obtain this conclusion by estimating a very simple model highlighting the interaction of factor endowments and income differences in determining the pattern of trade. Our estimates indicate that a 1pcrecnt increase in the scale of economic activity raises pollution concentrations by 0.nber. Brien R. by exploiting the panel structure of our data set. “Is Free Trade Good for the Environment?” http://www. Combining this result with our estimates of scale and technique effects yields a somewhat surprising conclusion: if trade liberalization raises GDP per person by I percent. Free trade is good for the environment. An increased rate of growth of income caused by trade can help promote environmental quality. 98 [Werner Antweiler. “Poverty per se is a form of environmental degradation and thus economic well-being is an environmental plus. It is simply easier and more cost effective to produce products to meet the highest standards. CSO] We find that international trade creates relatively small changes in sulfur dioxide concentrations when it alters the composition.25 to 0. 64+. Scott Taylor. of national output. M. safety. 1998.

Subsidized fishing fleets over fish ocean fishery stocks. such as Canada and Australia. and 89 percent in Africa is for domestic fuel and charcoal. it also increases prosperity which invariably ultimately leads to domestic demands for better environmental regulations and less pollution. "Almost all the annual logging in developing countries is for domestic production of fuel and charcoal . 9. www. It is growth that does not spread prosperity that invariably increases pollution. The most polluted cities are in the undeveloped and developing world. and air. “Free Trade Under Fire”. then open access to the resource frequently leads to its exploitation beyond the socially optimal level. & All too often. When property rights are not well established. nobody owns! The most widespread environmental problems arise from abuse of the commons.but there is often a direct relationship between protectionist subsidies and environmental problems.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Environmental Damage Now Environmental damage independent of free trade policies – no causal relationship Irwin. Taxing timber exports to encourage purchase of value added plywood and other mill products in Indonesia results in 15% greater use of timber because of wastage from inefficient Indonesian mills. "Because trade in itself is not a driving force behind pollution. "Countries that have a comparative advantage in agriculture." (What everybody owns. September 1. Agricultural subsidies and trade restraints encourage marginal farming heavily reliant on agrochemicals and intensive animal production practices and overgrazing. such as Argentina and Brazil. or developing. reducing local incentives to properly manage their forest resources. "The burning of the Amazon rain forests is largely motivated by local inhabitants clearing land for their own use. whether they are industrialized.. However. occurred in the old Soviet Union and its satellites. logging for timber and timber products is just a minor cause of deforestation in tropical countries. 4. when no one has ownership rights and control over a resource. that is.futurecasts. blocking the timber trade would immediately reduce the value of the forests." . About 77 percent of forest timber production in Asia. The overuse of these resources is commonly related to the lack of well defined property rights. 2002. accessed 7-1-13 BLE] The greatest environmental disasters. sea. do not depend as heavily on fertilizers and pesticides to maintain output.. 9/1/02. Irwin notes. a policy of free trade rarely detracts from such goals. Environmental damage results from the inappropriate use of our natural resources in the land. environmental concerns are raised by protectionist forces and ideological opponents of capitalism to kill trade liberalization rather than for any legitimate environmental purpose. No." Indeed. professor at Dartmouth.) There is no connection between trade liberalization and environmental degradation . 02 [Douglas A. & Trade does increase industrial production." "Environmental damage results from poor environmental policies. and in many instances may help.for the simple reason that [wood] fuel and charcoal are the cheapest source of energy for poor people. Trade restraints notoriously confine prosperity to the politically powerful and favored classes. not poor trade policies." & Moreover.com Vol. The inefficiency of local processors is common in these cases. not international trade. Irwin points out. 70 percent in South America.

As per capita incomes rise in less developed countries. September 1. but it has no plans to lift its ban. Free trade and domestic liberalization—and the faster growth they create—are the best ways to encourage higher standards. If anything. The OECD has found that. animal. But WTO rules place no restraints on the ability of a member government to impose any environmental regulations determined to be necessary to protect its own environment from domestically produced or imported products. The United States retaliated against the EU in May 1999 by imposing sanctions on $ 117 million worth of imports from . plainly states that members may impose trade restrictions “necessary to protect human. 2000. 00 *Daniel.”19 In other words.” as advanced nations are forced to weaken labor and environmental standards to compete with lessregulated producers in developing nations. trade liberalization encourages higher standards. http://www. have spurred a political backlash—dramatically evident in the street protests that plagued the WTO ministerial in Seattle. researcher for the CATO Institute. This theory rests on the assumption that lower standards give LDCs a significant advantage in attracting global capital and gaining export markets at the expense of more developed countries.org/publications/commentary/blessings-challengesglobalization. “The Blessings and Challenges of Globalization”. in practice.” The Sanitary and Phytosanitary Agreement of the Uruguay Round does require that such restrictions be based on sound scientific evidence—a commonsense requirement necessary to discourage the use of health and safety issues as a cover for protectionism. as embodied in the WTO. a lack of core labor standards plays no significant role in attracting foreign investment or in enhancing export performance. or is perceived to have caused. A prominent example is the European Union’s ban on the sale of beef from cattle treated with growth hormones. Article XX of the General Agreement on Tariffs and Trade 1994. and that it has exacerbated the gap between rich and poor. Critics of globalization warn of a destructive “race to the bottom.cato. If WTO members are found to be in violation of their commitments. researcher for the CATO Institute. Some environmental activists complain that the global trading system. and the ability of the productive sector to pay for them. the basic charter of the WTO. even though it has produced no scientifically sound evidence that the banned beef poses any hazard to public health. The OECD did find strong evidence “that there is a positive association over time between sustained trade reforms and improvements in core standards. they remain free as sovereign nations to simply ignore any adverse WTO rulings against domestic regulations that impact trade. thus raising average standards in the host country. The EU has repeatedly lost in the WTO. multinational companies tend to impose higher standards on their overseas production plants than those prevailing in local markets. favors free trade at the expense of environmental protection. not lower standards. For reasons of internal efficiency as well as public perceptions.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: WTO Rules Countries open to trade have the most protective environmental policies —no WTO punishment Griswold. accessed 6-31-13 BLE] The advance of globalization has not been a smooth or a pain-free process. Two of the most common complaints against globalization are that it has undermined labor and environmental standards. or plant health. Punishing LDCs with trade sanctions would only cripple their long-term ability to raise domestic labor and environmental standards. both among and within countries. The changes it has caused. so does the domestic political demand for higher standards. the real race may be toward the top.

Turtle decision. the political demand for pollution abatement rises. In an earlier. In both these cases. . cautioned that the flight of factories from the United States to Mexico: “would increase pollution loading levels on the continent and would trigger pressures within the United States to lower environmental standards to improve competitiveness in order to stop the flights. As a country sees its standard of living rise through economic liberalization and trade expansion. ban on shrimp from countries the United States judged were not adequately protecting sea turtles from being caught and killed in shrimp nets.S. In the so-called Shrimp-Turtle case. Friends of the Earth. First. and Public Citizen. and those who believed that freer trade would stimulate national economies. environmentalists divided between those who were convinced that free trade would lead to greater damage to the environment. is flawed on several counts. NAFTA brought these two positions into stark conflict. Non-trading countries more susceptible to environmental damage Kwong.educated middle class. however. accessed 7-1-13 BLE] Environmental activists. Most vocal was the anti-NAFTA environmental lobby. similar case.fee. who typically take a unified stance on major issues ranging from global warming to endangered species protection. The Sierra Club.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Europe. argued that NAFTA would provide an opportunity for U. February 1. the United States remains free to simply ignore the WTO ruling and continue enforcing the law as is. Generally speaking. for example giving Latin American suppliers more time than Asian suppliers to comply with the law. environmental regulations. Expanding trade is not merely compatible with high standards of environmental quality but can lead directly to their improvement. writer for the Foundation for Economic Education.S. this reflects the economic stage that they are going through. companies to migrate to Mexico and escape more rigid American environmental laws. however. among others. 94 *Jo. there is little historical evidence of polluting industries migrating to countries where environmental standards are lax. Antitrade environmental activists complain that several decisions by the WTO have undercut U. Polluting industries which spend heavily on controls remain concentrated in the developed countries. the WTO ruled against a U. its industry can more readily afford to control emissions and its citizens have more to spend on the “luxury good” of improved environmental quality.”1 This thinking. the WTO had ruled against a U. rather than environmentally induced migration. international program director for the Sierra Club. Environmental critics of the WTO point to these two cases as proof of their claim. experienced an unusual split with regard to the North American Free Trade Agreement (NAFTA). better. it was not the law itself that ran afoul of WTO rules but the discriminatory way the United States went about implementing it. ban on tuna from Mexico that the United States claims was caught through a process that endangers dolphins. above what they need for subsistence. “Environment and Free Trade Countries Must Be Rich Before They Can Be Clean”. 1994. but retaliation as a weapon of trade disputes existed long before the WTO.org/the_freeman/detail/environment-and-free-trade#axzz2XvAnkccU. but that option would always exist even if the WTO did not. And in the case of the Shrimp. The affected nations could in theory retaliate with trade restrictions of their own if the United States refuses to comply . Today the most restrictive environmental laws are maintained in developed countries that are relatively open to trade. And as economic growth creates a growing. http://www.S.S. Larry Williams. ultimately creating more resources to help protect the environment. While many developing countries are experiencing rapid industrial growth.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Ironically. Free Trade . protectionist countries–particularly in the former Communist world–that became pollution havens. it was the closed.

such as property rights. Analysis shows that existing GATT regulations place virtually no constraints on the ability of a nation to protect its own environment and resources against damage caused by either domestic production or domestically produced or imported products. “rich consumers are more willing than poor ones to spend substantial parts of their income for safeguarding high environmental standards. “Trade and Environment: Free International Trade and Protection of the Environment: Irreconcilable Conflict?”.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Environmental Protections Free trade is a catalyst for environmental protections Schoenbaum. Professor and Executive Director of the Center for International and Comparative Law and the University of Georgia. As economic activity increases. n11 and (3) ensuring economic growth. poverty is a significant cause of environmental degradation. are equally essential for raising environmental quality.18 Lacking significant employment . n12 Trade provides the economic growth necessary to enact environmentally safe policies Sheehan. He specializes in policies concerning international environmental regulation. finance. and waste disposal. Moreover. 2000.. October. As a recent GATT informational report n8 has pointed out. Lexis+ The environmentalists who argue that free trade will destroy the environment are shortsighted and wrong. 00 [James M. overfishing. an economist at the University of Luleo in Sweden. These institutions form the bulwark of private stewardship of natural resources and. Poorer people are more likely to exploit environmental commons in search of fuelwood and other basic necessities. 92 *Thomas J. particularly for developing countries. Since most human actions strive to improve quality of life.org/op-eds-andarticles/free-trade-green-trade.”17 Furthermore. greater economic resources are made available to address the primary human needs. trade. and foreign aid. “Free Trade Is Green Trade”. Market forces naturally drive economies to become more efficient by reducing the costs associated with energy and materials use. thus. June 1. adjunct scholar at the Competitive Enterprise Institute. environmental amenities receive greater attention. so does human interaction with nature. will actually help the environmentalists' cause by (1) fostering common standards for environmental protection that must be observed even by certain developing countries that currently ignore environmental concerns. sustainable management practices. which will create the financial means. that are environmentally destructive. since growth creates wealth. to control pollution and protect the environment. http://cei. n10 (2) terminating subsidies. there is no fundamental conflict between GATT rules and the need to protect environmental quality. Environmental improvements are particularly significant in market-oriented economies. trade liberalization. According to Marian Radetski. which must be fulfilled before individuals will focus on environmental amenities. The societal institutions that facilitate prosperity. and stress to water resources. particularly in agriculture. n9 GATT rules can also be made consistent with efforts to preserve regional and global environmental quality. marketbased prices. causing overhunting. as well as inefficient. accessed 7-2-13 BLE] There are a variety of reasons for the beneficial relationship between growth and environmental quality. whether on a global or regional basis. Furthermore.. and overall economic freedom..

and more aesthetic in nature.cfm.heritage. Free trade is a . The result is environmental degradation in the form of soil erosion. 24 Free trade increases economic growth which enables environmental protection Eiras and Schaefer. As societies advance. there is a strong anti-market bias to environmentalist arguments. As a country's standard of living rises through economic liberalization and trade expansion. economic growth enables societies to advance in ways that are environmentally beneficial. while preventing the types that are not. its industry can more readily afford to control emissions and its citizens have more discretionary income to allocate toward improved environmental quality. Environmental concerns generally become less life-threatening. accessed 7-2-13 BLE] The key to increasing environmental protection in developing nations is to increase economic growth. On the contrary.org/Research/TradeandForeignAid/BG1480. Even though growth coincides with environmental improvement. Fellow at the Heritage Foundation. As environmental and other resources are integrated into the market system of voluntary exchange.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade opportunities and productive land.” http://www.19 Moreover. technological. At earlier stages of development. which encourages more creative resolutions of environmental and other problems. desertification. The task of ecological central planning is no easier than economic central planning. Many environmentalists consider the system of capitalism and private enterprise inherently responsible for environmental externalities. pollution problems decline in severity. Yet no government has the capability of assimilating the vast amounts of economic. Only government regulation in the public interest can force businesses to internalize social costs.23 Free Markets Are Truly Green In a market economy. Air. the poor in the Third World often must utilize marginal lands for food production. Falling prices for energy and raw materials demonstrate that the market’s technological improvements and efficiency gains are making resources more abundant. attempting to farm in deserts or tropical forests. pollution problems are likely to be more threatening to human beings.21 Central planning failed largely because it could not efficiently distribute resources. and scientific data necessary to make such determinations. Internalization is made possible by the extension of property rights and a system of voluntary exchange to an ever-wider array of resources.22 Without a profit motive.and water-borne hazards can result in immediate illness or death. Socialist countries. information is conveyed through prices. Thus. 01 *Ana and Brett. there is little incentive for political owners of a resource to conserve for the future in order to maximize returns. Economic Policy Analyst for Latin America at the Heritage Foundation. Government is entrusted to effectively foster only the types of economic growth which are environmentally friendly. and such regulation must be extended to trade. without the profit motive of the market. The market-failure argument leads inexorably to central planning. even in times of recession. any human activity with environmental impacts must be politically controlled. environmental and other costs are internalized more thoroughly via the price system. some of the worst environmental degradation in the world occurred in the former Soviet Bloc. Neither could it safeguard environmental resources.20 If market failure was truly the cause of pollution. “Trade: The Best Way to Protect the Environment. “market failure” is often blamed for the existence of pollution itself. are generally more resource intensive. and deforestation. however. we would expect the absence of markets in the centrally-planned economies of Eastern Europe would have been environmentally beneficial. according to this argument. Data from sample market and socialist economies shows that market economies become more resource-efficient with economic growth.

" 3 Full liberalization of the economy. and then to fall with GDP at higher levels of income... but eventually to reach a peak.. Specifically. By opening markets and creating more business opportunities. Wealthier societies not only are better able to afford environmental protection. leads directly to increased economic growth. 5 .Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade central component in increasing economic growth. and market share. is the most effective environmental preservation strategy because economic liberalization. Gene M.We find that economic growth brings an initial phase of deterioration followed by a subsequent phase of improvement. concluded that pollution appears to rise with GDP at low levels of income. including free trade. 4 This relationship is supported by extensive evidence published by the National Bureau of Economic Research. Krueger. Companies can choose to build on those profits by expanding their operations. beginning with an open trade policy. free trade fosters economic growth by rewarding "risk taking by increasing sales. and creating better-paying jobs. for example. the evidence demonstrates thAT: Wealthier societies are more likely to demand and implement greater environmental protection because they can better afford the costs of those policies. Grossman and Alan B. but also show a proven desire for such protection that increases as income grows. entering new market sectors. profit margins.

Geopolitics .Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Bad .

and an everwidening gap between the richest and poorest nations. Echevarria II. and economic prosperity. such as weapons of mass destruction or mass effect. distributing economic prosperity still further. things. especially as the world’s population continues to grow. Department of State currently reports that more than 60 active terrorist groups exist (with some 100. March. thirteen more are actively seeking them. collapse after only transitory successes. ethnic rivalries. ISBN 1-58487-118-0. with the number expected to rise to between 80. and drug cartels.16 More than 25 countries now possess ballistic missiles. nationalism. learning from previous generations. since most autocratic regimes will probably not surrender power without a fight.14 Furthermore. 2003 *LTC Antulio J. and competition for scarce resources.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade War Globalization increases the propensity for war. including water. globalization is already changing how wars are being fought in the 21st century. the U. today’s terrorists have proven very adaptive. and over one-third of them have the capacity for global reach. Thus.17 Also. in order for military power to continue to play a significant role in the future. Moreover. and radical fundamentalism of all types. even relatively small states armed primarily with conventional weapons can pose significant security challenges to a superpower and its strategic partners.12 As numerous studies and strategic papers have pointed out. especially if the cultural backlash it has generated thus far gathers more momentum. and ideas will mean increased mobility for nonstate actors.000 members). religiousbased antagonisms. Director of Research @ Strategic Studies Institute. and over 75.000 by 2010.10 The world need not devolve into a “clash of civilizations” or a “coming anarchy. an proliferation of increasingly powerful weapons. as the 1999 Kosovo crisis demonstrated. serious crises would undoubtedly arise. at least 17 . Echevarria. weak. On the other hand.9 In this world. And. ad hoc security arrangements.nation polarization. terrorist networks.000 and 90. globalization could give rise to a more stable world in which national interests merge into the general aim of promoting peace. a number of crises— some of which will undoubtedly require military intervention—will most likely have had to occur beforehand.000 cruise missiles are in existence. for example. making them more dangerous than in any previous era.11 In any case. stability.” therefore. “GLOBALIZATION AND THE NATURE OF WAR”. autocratic backlash. or so-called failed states. the greater mobility of people. globalization will surely continue and may even accelerate if data concerning the rate of technological change are any indication.15 Globalization clearly offers them some extraordinary capabilities to communicate and coordinate their efforts. globalization might produce a more dangerous and unpredictable world. This world might be characterized by shifting power relationships. Strategic Studies Institute. chip] Despite its apparent positive impact on the spread of democracy and free-market economies. Transnational threats.8 A number of new democracies— lacking strong traditions for maintaining checks and balances—might. In fact. Eleven countries currently have nuclear weapons programs. thriving among autocratic. could continue to grow in strength and influence.13 At a minimum. weapons of mass destruction. such as international crime syndicates. the rule of law and the existence of pluralistic political systems would continue to spread. US Army War College. Even if this “Utopia” should materialize. could go unresolved.S. and changing their tactics in response to new anti-terrorist measures. and the number of free-market economies would expand. Globalization also facilitates the proliferation of destabilizing capabilities.

such as Al Qaeda. 48 The United States is seen as a major source of support for apostatic regimes and. weakening it politically and economically is essential for success. “GLOBALIZATION AND THE NATURE OF WAR”. U. rendering them vulnerable to disease.49 Instead. while. or those of its neighbors. the United States will not accept anything less than the complete neutralization. states fight to protect their economic interest Echevarria. at the same time. it might be necessary to have a final showdown with the “great Satan. biological. pose a serious threat not only to human populations. 2003 [LTC Antulio J. of Al Qaeda. and several so-called rogue states—have developed or are developing the capability to launch strategic-level cyber attacks. chip] The war against Al Qaeda and other terrorist groups of global reach represents the first conflict of the 21st century in which the characteristics of globalization—the enhanced mobility of people. More than 30 countries— including Russia.S. even though it is not necessarily bent on the immediate total destruction of the United States. ISBN 1-58487-118-0. It is certainly a war that neither side can afford to lose. Director of Research @ Strategic Studies Institute.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade countries— including the so-called “Axis of Evil”—currently have active chemical and biological weapons programs.22 The interconnectedness of many nations’ infrastructures means that a successful cyber attack against a single sector in one country could result in adverse effects in other sectors within the same country . Unfortunately. the proliferation of weapons of mass destruction and the emergence of powerful nonstate actors. do not mean the end of decisive warfare or of major wars among states.18 As the Assistant Secretary of State for Nonproliferation recently explained.” For its part. however. The political objectives of the combatants reflect that realization. crops lack genetic diversity. globalization assists some powerful motives that run counter to nonproliferation efforts. a devastating ripple effect would surely spread throughout the global economy since the United States produces 30-50 percent of the world’s foodstuffs.23 Globalization lowers the threshold for war. and all infidels are driven from Muslim holy lands.20 Thus. In order to ensure ultimate success. proliferation of chemical. hence. Sources indicate that. China. if not destruction. Furthermore. therefore. Strategic Studies Institute. Echevarria II. radiological. we find a general shift toward less overt and more protracted forms of conflict. the nation’s centralized feeding and marketing practices make livestock extremely vulnerable to a biological attack. US Army War College. especially. both for strategic leverage against the United States and for economic advantages. even if neither side has fully mobilized all of its forces to date. If such an attack were to occur. Biological weapons.”19 For example. all illegitimate or corrupt Islamic regimes are replaced by a unified Muslim polity and Caliphate. despite the provisions of the Nuclear Non-proliferation Treaty and the Chemical and Biological Weapons conventions. things. major powers such as the United States emphasize a greater willingness to take unilateral preemptive action or to .21 Globalization has also introduced a new form of warfare: cyber-war. Contrary to what historians such as Martin van Creveld have argued. and the number is rising. March. Al Qaeda will never compromise and will continue to fight until all religious apostasy is eliminated. and ideas—have come into play. intended (and unintended) adverse effects could well travel globally. China and North Korea have long contributed to the proliferation of chemical and biological weapons. Indeed. nuclear and high explosive/high yield weapons continues worldwide: “There is an intense sort of cooperation that goes on among countries that are trying to acquire such weapons. but also to agriculture and livestock.

rather than to satisfy a cultural impulse to wage war.” They have become the primary target in both a physical and a psychological sense for Al Qaeda and a psychological sense for the United States. military response to the attacks of September 11. Both President George W. though one would hope that in the case of Al Qaeda the access would be less secure.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade respond to attacks involving weapons of mass destruction in any manner deemed appropriate.” Nonetheless. this trend does not appear likely to reverse itself. or to garner further support. 2001. or Islamism as some authorities identify it. Al Qaeda has created new cells and reconstituted older ones. throughout every operational phase. Otherwise. the fact remains that both sides are using war as a political instrument. thus far at least. the element of blind natural force is playing the decisive role. it has managed to create a substantial support base that may enable it to regenerate itself indefinitely. And. Moreover. and religious fabric of Muslim societies. Al Qaeda’s leadership might have sought to provoke a massive U. Both are clearly using war to achieve political ends. as Keegan argues. globalization has actually increased the latter’s role.57 In this war. has taken great pains to portray the conflict as a war against terror tactics rather than a war against Islam. Political leaders on both sides can also have real-time access to military actions as they unfold. while at the same time challenging or vexing his opponents. which it sees as a form of decadence. troops. contributed to the creation of fertile breeding grounds for terrorism as some groups try to resist its encroachment. Globalization has.S. Consequently. political. Al Qaeda has associated the United States with the spread of globalization. for example. has been moving from the margins of the Islamic political spectrum toward the center. the West. that is.56 The Islamist’s mindset is that the current war is one in which God’s warriors—the mujahidin—are heroically fighting the forces of Satan: U. so that bin Laden and other key terrorist leaders may enjoy considerable empathy. no matter where it occurs.51 Indeed.53 Despite the arrest of hundreds of operatives in North America and abroad since the attacks of September 11.50 Moreover.55 Evidence also suggests that Muslim extremism. the public statements by President Bush and bin Laden’s periodic releases of video messages through Al Jazeera demonstrate that each can address his support base to give it guidance or motivation. they are subordinating its conduct to the achievement of political ends. culture and politics are inextricably linked in this conflict. This capability means that political direction of a campaign can span time and distance to influence the smallest of details.S. civilian populations of both sides are more than a manifestation or a reservoir of “blind natural force. In the global war on terrorism. conscious of this possibility. it was hoped. which it could then portray as an assault on Islam. the conflict remains thoroughly political at every level and. regarding their words and actions. Bush and terrorist leader Osama bin Laden have released statements that link their actions to very explicit political agendas. With what has been described as a . both sides can more or less communicate their intentions to their operatives in the field and thus influence the course of events throughout every phase of a military operation. Furthermore. Building on the perception that Islamic society’s current political and economic problems are the result of the West’s decadent values and duplicitous policies. instead of culture displacing politics as the primary force behind conflict. To be sure. not that it should. would inspire the entire Islamic world to rise up against the West.54 While operations in Afghanistan and elsewhere have led to the killing or capture of some 16 of its 25 key leaders. if not sympathy. the conflict between Al Qaeda and the West may indeed escalate into a more dangerous “clash of civilizations. Al Qaeda’s ideology remains intact and will probably continue to draw young Muslims. This general assault. among other things. both in determining the purpose for and influencing the actual conduct of war . to include massive retaliation against major states. Al Qaeda has penetrated Islamic nongovernmental organizations and woven itself into the social.52 Still. it must continue to do so. Hence.

547-572. Globalization decreases escalation management Echevarria. Indeed. colliding via the means of organized violence with multinational populations serving both as resources and as targets. March. The forces of Islamic terrorism are fueled by volatile extremist ideas and. 4. First. Certainly.. the war against global terrorism is foremost a battle of ideas—ideas powerful enough to provoke violent emotions. McDonald. Director of Research @ Strategic Studies Institute. The United States and its strategic partners must take the fight to the enemy on that front and win there decisively. is now being psychologically prepared (one can argue how well) by its political leadership for a long fight in which conditions might get worse— particularly if an attack on Iraq or other “rogue” states occurs—before they get better. The Journal of Conflict Resolution. US Army War College. pp. 2004. particularly in areas “suffering” from the spread of globalization. Political leaders can now mobilize hostile passions more quickly and over a larger area than hitherto.”59 In other words. war remains essentially Clausewitzian in nature. No. the global war on terrorism remains at heart a conflict of opposing ideas. associate professor in international relations theory and international political economy @ UT Austin. Free trade causes military conflicts to open markets and gain resources McDonald. Aug. globalization is changing the nature of war in several ways. Second.jstor. Consequently.S.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade “virus-like ability to infect indigenous groups. Vol. the U. Strategic Studies Institute. chip] If the war on terrorism is any guide. 2001. “Peace through Trade or Free Trade?”. 2003 *LTC Antulio J. Finally. These changes may amount to a net increase in the dual element of chance and uncertainty at all levels of war. Yet. it is within this arena that the war will be won or lost. and with a broader array of weapons. which lacked any deep-seated feelings of hostility prior to September 11. this control will vary depending on the personalities involved as well as a combatant’s ability to interdict its opponent’s communications. it is strengthening the role that politics will play in war by affording it the capability to exert greater real-time control over military operations. some of the current political rhetoric of the administration and its supporters likens the war against terrorism to “World War IV. in new dimensions.org/stable/4149808. globalization means that opponents (even if they are neighbors) can now fight each other across global distances. skillful commanders and well-trained militaries still matter. 48.” Al Qaeda has turned itself into an ideological weapon that evidently excels in the generation of propaganda to support its cause. hence.58 By comparison. Of course. 2004 *Patrick J. Sage Publications. It remains to be seen whether information technology will reduce or exacerbate this expansion. populace. “GLOBALIZATION AND THE NATURE OF WAR”. even with the rapidly spreading and intensifying effects of globalization. chip] . as has been shown. ISBN 1-58487-118-0. Yet. It is still a dynamic expression of political wills in conflict. Images and the ideas they convey may now be more decisive than the sword. it may prove more difficult to cool such passions than it did to ignite them. http://www. globalization is increasing the criticality of the element of hostility. Echevarria II.

Alt and Gilligan 1994) illustrate that gains from trade. then larger aggregate trade flows should promote peace (Domke 1988. protectionist interests are less likely than other groups to lobby the state for peace when conflict threatens to interrupt trade.. First. Sectors that do not rely on the state for protection while surviving in international markets can generate new markets for simple efficiency reasons.'0 At the very least." These possibilities demand that any claim that commerce reduces military conflict must account for the relative political strength or veto capacity of societal groups unlikely to support liberal commercial policies and peace for economic reasons. military expansion can also provide concentrated income gains to these groups by enlarging a protected domestic market through conquest and the integration of another economy. military conflict may create income gains for these sectors by expanding their share of domestic markets. scarce factors of production are likely to lobby for protection to reduce imports and prevent the erosion of their income (Stolper and Samuelson 1941). economic interests can lead some societal groups to favor the closure of national markets to international trade. Organizational advantages thus help those groups most hurt by international trade to overcome the collective action problem and mobilize support for protective policies that insulate their sectors from international competition. I have already discussed how revisions in standard trade theory illustrate that all factors or sectors in an economy do not receive income gains from trade. Similar organizational difficulties may reduce the effectiveness of societal constraints on a government's efforts to use military force . whether in the form of factory closures or job losses. they should be unlikely to support such a policy if it were to achieve the same outcome (of new overseas markets) they could achieve without the use of force. Given that the use of military conflict may carry the risk of additional costs to these sectors. by reducing imports and foreign competition. The primary beneficiaries of free trade face significant organizational hurdles in their lobbying efforts pursuing both free trade and peace. Studies of the domestic politics of commercial policy (e.12 Apart from understanding the role of protectionist interests in decisions to use military force. Sectors relying on protection may even actively support aggressive foreign policies for two reasons. Second. This diffusion reduces the willingness of these groups to undertake costly lobbying activity for the relatively small benefits of greater openness to trade. This proposition similarly implies that economic interests can lead certain groups to support any policy.g. As the political influence of the beneficiaries of commerce and trade expand in relatively equal proportion. For example. are often more concentrated in specific industries or firms. At the same time. Their goods penetrate new overseas markets because they are cheaper than those of international competitors. are often diffused throughout society.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade By focusing on the aggregate benefits of commerce. including the use of military force. an important distinction separates this claim from more traditional ones. Consequently. the costs of economic integration. 48). which reduces commerce and import penetration. one must also examine the influence of their societal opponentsthose favoring peace for economic reasons-in this domestic struggle. most variants of commercial liberalism risk assuming that all individuals within society receive income gains from trade and that these same individuals will lobby their government to enact a peaceful foreign policy to realize these economic goals. The extent to which economic interests rely on regulatory protection from the state to remain profitable plays a critical role in their support of military force for economic expansion. These mechanisms linking the economic interests of society to preferences over foreign policy decisions on war and peace need to be refined for several reasons. Similar to the standard arguments linking imperialist interests to conflict. At the same time. whether in the form of reduced prices for consumer goods or new export markets. sectors that are less competitive in international markets may be more willing to risk recovering any costs of war in new markets that they otherwise could not acquire without the use of force.

The level of protection in an economy thus provides one means to assess the relative strength of domestic economic interests in favor of war or peace. These twin possibilities suggest that the income gains from trade may not always provide sufficient incentives to prevent conflict if their beneficiaries possess relatively weak domestic influence . trade policy outcomes can indicate the relative balance of political strength between societal groups fighting a domestic battle over commercial policy. we need to assess the relative political strength of these groups. To understand the conditions when trade activates these societal interests to produce peace. the domestic political influence of these groups on the state and the potential for military conflict should also increase. smaller levels of protection indicate that free trade lobbies likely to oppose military aggression possess relatively more domestic political influence. The aggregate benefits that stem from avoiding the costs of war may be spread evenly across society to prevent individuals from undertaking the costly lobbying activity necessary to restrain a government from using force.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade as an instrument of foreign policy (Gowa 1999).tlefield outcomes reduce ambiguities about the prewar balance of military power and resolve between states (Fearon 1995. Just as bat. As the size of protected sectors increases. . Greater levels of protection in an economy indicate that import-competing sectors have successfully lobbied the state to enact regulatory barriers and possess relatively more political influence than the beneficiaries of trade within the domestic political game. Conversely. Wagner 2000).

” Of course. by resisting such calls. Furthermore. conservatives suppressed their normal nationalist sensibilities in deference to the greater cause. trade barriers are treated like nuclear missiles in arms control talks — prized strategic assets that are given up only in exchange for foreign assets of equivalent value. http://www. And to enforce these increasingly ambitious agreements.”) With the issue so framed. Through linking trade liberalization exclusively with international negotiations. free traders appear to be asking the United States to play by less favorable rules than apply to other countries. the equation of trade with war is economic nonsense. In particular. And the benefits of open markets accrue regardless of whether other countries maintain similarly liberal policies. efforts to “harmonize” national policies on labor and the environment are working their way onto negotiating agendas at both the regional and multilateral levels. the direction of trade negotiations in recent years suggests a connection between free trade and the progressive diminution of U.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade US Heg Free trade causes protectionist backlash and damages US hegemony at the expense of other nations Brink Lindsey. markets unless foreign countries let in more American goods. Trade “hawks” argue that relatively open markets amount to “unilateral disarmament. Cato.S. Thus. free traders have seldom challenged the protectionist misconceptions that trade talks encourage. Now that the Cold War has ended. is not a zero sum game: one country doesn’t “win” at another’s expense.org/publications/commentary/free-tradenationalism. the World Trade Organization — have been created and empowered to pronounce judgment on national laws’ fidelity to international obligations. they argue. national economic interest to broader concerns. it’s not surprising that a growing number of conservatives are ready to throw the free-trade baby out with the internationalist bath water. 2012 *“Free Trade Nationalism”. in trade talks countries agree to reduce their trade barriers only on the condition that other countries do likewise. Trade. Nevertheless.” and urge that we close off access to U. by the twisted logic of trade negotiations. After all. If trade liberalization is part of a package deal that .S. and now maintaining some kind of nebulous “influence” — outweigh narrow commercial concerns. a commitment to reduce tariffs is a “concession.S. they have actually conveyed the impression that free trade requires the subordination of the U. openness to foreign competition is not a vulnerability. national sovereignty. though. broader geopolitical interests — countering Soviet power. On the contrary. it allows a country’s citizens to enjoy the best goods and services the world has to offer. the military metaphors proliferate. in the parlance of the General Agreement on Tariffs and Trade. unlike war. (Indeed. Thus. Their position is that America is strong enough to “win” at international trade even with the deck stacked against us. By and large they accept the notion that the United States is somehow at a disadvantage because most of our trading partners maintain higher trade barriers than we do. a senior fellow at the Cato Institute and the director of its Center for Trade Policy Studies. get cast as “doves. During the twilight struggle with communism. chip] It’s not just that free traders have sold their cause on foreign policy grounds. The scope of trade agreements has broadened far beyond simple tariff-cutting to encompass sweeping forays into traditional domestic policy areas. new and more powerful international institutions — most notably. Free traders. and anyway.cato. In particular. and to specialize in those pursuits at which they are relatively more productive.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade seemingly sacrifices America’s national economic interest and erodes its sovereignty in favor of some incipient world government. Much has been written about the need for political reform in the Arab world. decontrolled prices. and farm products. dead-looking figures wandering about the streets in their everlasting search for food came to life.000). but the real story was the continent’s turn toward markets and free trade. Marshall Plan aid played a role in reviving Western Europe. and little trade other than arms and oil. and send a positive signal that Iraq is open to foreign investment. The economic policy of his Baathist Party was a kind of thuggish socialism: government control of prices and industry.S. “War is God’s way of teaching Americans geography.600) or even Iran ($7. Even many conservatives who know enough economics to reject Pat Buchanan’s full-throated protectionism are finding it ever harder to maintain allegiance to the free-trade agenda as currently constituted. although not in a way most people believe. With the Saddam regime now history. Iraq’s imports are a fraction of what they were in the 1980s.200). but it has been abundantly blessed by geography. The gray. After weeks of intense coverage.500 a year. including a commitment to free trade. at home and through international trade. and other countries that have achieved sustained growth through expanding trade—not the stagnant and increasingly isolated countries of the Arab Middle East. America’s well-earned victory on the battlefield will be in jeopardy if the people of Iraq cannot enjoy the material fruits of their new-found freedom. cement ties between our two countries. ubiquitous rationing. Saddam Hussein squandered and stifled the potential wealth of his country by his warmongering and official thievery. and the war in Iraq is no exception. when it citizens were buying almost $1 billion worth of U. Two great rivers bound a fertile plain in a subtropical climate. hungry. the United States and Great Britain should ensure that any new Iraqi government protects the economic as well as the political and civil freedom of its citizens. apparel. one fact is plain: The people of Iraq should be among the richest in the world. To safeguard our investment of blood and treasure. In June 1948. As one historian noted: “The spirit of the country changed overnight. U. It possesses a seaport and ready access to major markets. If France and Russia insist on keeping sanctions in place to protect the UN’s bureaucratic control over Iraqi oil. Saudi Arabia ($10. the rule of law and contract.S. Chile. far lower than the per capita GDP of Qatar ($21. Iraqis must enjoy a secure right to property. trade with Iraq would bring humanitarian relief. the country sits on top of the world’s second largest known oil reserves. but it also desperately needs economic reform. especially importsensitive textiles. Post-war reconstruction of Europe provides a model. Its per capita gross domestic product is the equivalent of $2. and the freedom to engage in business. And. Saddam’s misrule has left Iraq by far the poorest country in the Persian Gulf region. Among his many crimes. farm products a year. An essential part of any plan to establish freedom in Iraq should be a commitment to a free market and the institutions that support it. Study after study has confirmed that nations relatively open to trade grow faster and achieve higher incomes than those that are relatively closed. Outside . Kuwait ($15. arbitrary confiscation of private wealth. then thanks but no thanks. the United States should ignore the sanctions and unilaterally allow Americans to trade with the people of Iraq.000). the tigers of East Asia. Tax and tariff cuts soon followed. markets should be opened to goods made by Iraqis. Yes.” the 19th century American writer Ambrose Bierce sagely observed. As the repository for many of the world’s greatest archeological sites. of course. Germany’s Ludwig Erhard abruptly repealed price controls and issued a new currency. Iraq has been cursed by brutal politics. The Arab world’s share of global trade and foreign investment has been declining in the last two decades. a stable currency.” Iraq needs an Arab Ludwig Erhard. The model for Iraq’s new leaders should be Ireland. Beyond stimulating growth. it should be a tourist Mecca. UN sanctions should be lifted immediately.

This does not sound like any kind of positive freedom. 4-8-12. dynamism. Like a shopkeeper who places blind faith in the “honor system” to prevent theft. 56 percent foreign penetration in America. There is nothing American producers can do to compete against these structural cost disadvantages except for offshoring production or importing more components. Freedom to have social insurance. those same market forces can help us win the peace. accessed 7-413 CSO] Free trade should more accurately be called “freedom for other countries to undercut and destroy American domestic production” because in practice that is what is happening.S. and protected home markets. health care. China has consistently manipulated its currency for 10 years without reprisal.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade of oil. Arab countries export little that the rest of the world is willing to buy. Very little of what is consumed here is made by American owned companies operating in America. Free trade agreements are impossible for the U. employee benefits. With a few exceptions. There are more McDonald’s franchises in the tiny Netherlands than in all the Arab world. we are assuming these other countries are fools if we assume they will not exploit our “anything goes” wide open markets and our inability to enforce trade agreements in their countries. Foreign companies have advantages that American companies do not have including subsidies. American industry is merely the foreign-controlled . America’s ability to be competitive was the first freedom “free trade” destroyed.S economy and leadership Heffner. if spread to Iraq. “The real cost of ‘free trade’ “ http://economyincrisis. An educated. Proponents dismiss the destruction to American domestic production by wishfully thinking that we will find new ways to reinvent ourselves. Economy in Crisis. This is an undeniable fact that should be obvious to any consumer or business in this country. its people will grow frustrated and blame the market and the West for their troubles. and it was not how the wealth of this country was created. writer for economy in crisis. Foreign penetration of the Japanese auto market hovers around 1 percent vs. American producers now face a 22 percent cost disadvantage to foreign producers according to the National Association of Manufacturers through taxes. science and ideas. 12 [Thomas. The technology. time and means to raise children. A vibrant Iraqi economy would give hope to a new generation of Arabs to reclaim their rightful place in the world of trade. Increasingly. creating fertile soil for terrorism. The social fabric of our society – which starts with the opportunity to earn a good living – is being eroded as more of our good paying jobs leave this country. Proponents of free trade justify their position by saying free trade is supplying American consumers with access to the lowest cost. This was not formerly the case. barriers to trade and foreign investment remain high. hopeful middle class would in turn create more fertile soil for limited and representative government. However. We are depending on the goodwill of other countries and blindly hoping they play by the rules. Free trade collapses U. to enforce in other countries. but it will not be the last. this does not justify the terrible consequences of free trade. How will we continue to pay for these cheap foreign goods with no industry to generate our own wealth? “Free trade” proponents fail to say that free access to subsidized foreign production is destroying America’s chances to be competitive. low cost labor. and openness of our own market economy helped us win this war.org/content/real-cost-%E2%80%9Cfree-trade%E2%80%9D. most competitive market. litigation costs and environmental controls. But if a post-Saddam Iraq fails to prosper. security and numerous other freedoms that have come to be basic American rights all require a tax base that is being dramatically depleted in each and every city and town in America.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade assembly of imported finished components or distribution facilities for foreign goods. taxes. Free trade is destroying the economy and industry that in turn insures a strong social fabric. American states desperately offer huge subsidies and incentives to lure foreign producers to their soils in hopes of receiving a glimmer of a future tax base and some distribution or assembly employment. skilled labor. These socalled “industrial facilities” steal profits. capital equipment and technology from this country and send them back to the foreign parent countries. .

0006 vehicles in 1990 to 2. Mexican-based assembly factories import the majority of their parts or auto-part components. The real value of a car’s production (and the best jobs created in the process) is found at the beginning (design and engineering) and end (branding. Mexico houses little or no R&D and design operations. assembly jobs are extremely vulnerable. overflow factories in Mexico suddenly closed down.8 Almost all of the shipment of parts and assembled cars are handled by U. more than 270.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Latin American Economy Globalization exploits and hurts Latin American competitiveness Price. Korean and German .. The Mexican government likes to make a lot of fuss about its burgeoning auto assembly industry. But what does $40 billion of investment buy for Peru? Most of the money will be used to buy imported technology and services: American. It is a fallacy to claim that Mexico has a world-class automotive industry. all for export to Europe. Japanese and European logistics firms. Nicaragua and the Dominican Republic. packed and shipped elsewhere in less than 60 days. Without a national parts industry. When Mexico’s peso began to appreciate on the back of rising oil prices between 2000 and 2005. which grew from 821. Electronics assemblers in Mexico and Central America often rely on imports for 95-100% of their components. former government officials of the previous administration of Alan García proudly point out that over $40 billion will be invested in their country by mining companies over the next five years. that is where the car companies tend to invest. parts suppliers and customers.2 million7 5 But what is less often discussed is how much of the value of those cars is actually made in Mexico. manufacturing utilization dropped below 70% capacity during the financial crisis of 2008/9. sales and after-sales are run by wholly-owned subsidiaries of foreign automotive firms. Mastretta. It is an impressive figure and an important achievement for the government that relies on mining royalties for close to 40% of its total tax haul. but post-NAFTA re-export manufacturing is little different from pre-NAFTA maquilas. chip] Being globalized without being competitive makes one vulnerable to exploitation. when U. https://umshare. Most maquiladora operations are designed to be closed. Not surprisingly. Honduras. 2011 [John Price. Similarly. Non-automotive maquiladora sectors are even less integrated with national suppliers. Managing Director @ Americas Marketing Intelligence LLC. accessed 7/10/13. 10/19/11. The term maquiladora has fallen out of fashion in Mexico since the North American Free Trade Agreement (NAFTA) integration forced a change in the country’s re-export tax laws. happily outsourcing less profitable stages: parts production. clothing and other light manufacturing fled from northern Mexico to cheaper labor pools in Asia and Central America9 .S. Almost all of the branding. In Peru.edu/web/wda/hemisphericpolicy/Task_Force_Papers/PriceGlobalizationTFPaper.pdf. Mexico “competes” as a car maker because it can supply cheap labor and is well connected by road and rail to U. financing. “Globalization Is Here to Stay: Why Latin America Must Accept Its Globalized Destiny and Ready Itself to Compete”. let alone national brands and/or valueadded functions like design or after-sales service. An example of this is the maquiladora (assembly) industry found in countries like Mexico.S. leasing and sales) of the value chain.000 assembly jobs in electronics. Japanese. The Center for Hemispheric Policy @ University of Miami.miami. Car assembly represents less than 10% of the car’s value and is the least profitable and most easily replicated stage of a car’s development. assembly and logistics to third parties . Mexico has only one domestic car company. an exotic kit car maker that aspires to produce around 100 cars in 2011.S.

pdf. Loss of Latin American competitiveness leads to global economic decline Price. The global financial crisis unleashed loose monetary policy in the hopes of evading deflation. or at the very least. South Africa and Chile. save some key salesman and low-skill labor. Most of these product and service contracts are executed with little or no Peruvian support. cheaper credit and inflated currencies. Gold prices may double and mining investment may treble. Chilean. mineral wealth cannot be shipped in greater volumes. but if road and port infrastructure is clogged by old technology and burdensome bureaucracy. have universally slid since the commodity boom began in 2003. diminish in its splendor. An economic model built on the growth of labor-intensive. Canada. The U. the engine that ended the financial crisis for resource . auto parts and metal manufacturing are declining in Peru as the sol appreciates. Australian. value-added exports in the 1990s has been replaced by commodityreliant exports and very strong domestic consumption. which mean little to a short-term focused politician. borderline competitive industries like textiles. copper and silver exports. Such an environment provides little incentive to governments to undertake the second wave of reforms. favoring finance. whose sound balance sheets attracted rebound investment when monies stuck in U. “Globalization Is Here to Stay: Why Latin America Must Accept Its Globalized Destiny and Ready Itself to Compete”. But signs are emerging that the economic party lived by the region for almost a decade may soon end. While mining thrives. accessed 7/10/13. American information technology (IT) security. In spite of its youngish population.S. American and German software to drive operating systems. ergo productivity does not rise. judicial. Japanese and Western European economies. all of which augment their sense of wealth. 10/19/11.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade excavation and transport vehicles. Treasury bills went in search of yields in 2009 and 2010. frankly. As a result.. The Center for Hemispheric Policy @ University of Miami. such as political. tremendous resources and relatively open economies. more gratifying to voters who enjoy higher nominal wages. thanks to record gold. and all the like. chip] Latin American economies. The lack of productivity growth and wasteful spending in many Latin American countries limits their economies’ ability to absorb waves of new investment. most especially in emerging markets. educational and legal reforms. 2011 *John Price. face a tough economic decade ahead. They tend to ruffle the feathers of powerful interests and deliver only longterm and incremental benefits to the country. most Latin American central banks have been forced to raise interest rates once GDP growth levels stayed at 5% over a two-year period (2009/2010). https://umshare.edu/web/wda/hemisphericpolicy/Task_Force_Papers/PriceGlobalizationTFPaper.S.miami. including Latin America. responsible for about 45% of the global GDP. Peru has failed to develop support industries that employ skilled labor. Their heavy debt burdens will prove even tougher to bear when historically low interest rates are forced to rise thanks to energy and food-induced inflation. Runaway printing presses have created inflationary pressures the world over. But unlike more developed mining economies such as those of Australia. retailing and domesticbound durable goods industries over the last decade. Mining is essential to Peru’s publicly-funded development. Latin America’s lack of competitiveness denies it the ability to grow at East Asian speeds. Managing Director @ Americas Marketing Intelligence LLC. Even China’s economy. once rising stars in the global rankings of competitiveness. The internal consumption model is. If and when Peru’s present mining boom subsides. diversify the tax base and provide for exportable services. there will be relatively little residual benefit to claim from all that investment. American and Canadian engineering services.

The combined decline in available credit and investment growth will hurt demand for resources from 2012 onwards. by increasing efficiencies. The specter of a declining. then Latin America will need to raise productivity the old-fashioned way. commodity price boom around the corner revives the importance of economic competitiveness in Latin America. commodity demand. which will soon come on line. today’s commodity boom inspired new investments in oil and gas and mining production capacity between 2005 and 2008. reducing waste and competing once again in world markets with value-added goods. if not shrinking. Massive mining and energy investments that could have gone to Latin America ended up in safer and more competitive environs like Australia. . the Persian Gulf. the United States and China. Canada. which will pinch hard Latin American investments and the fiscal balance sheets of their host governments. On the supply side. if not disappearing.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade exporters like Latin America. is struggling with its own inflationary pressures and mounting balance sheets of wasteful real estate loans. the commodity sector faces a period of declining profits and consolidation. competing for stagnant. The runaway construction practices in China will need to step down a notch or two. If riches can no longer be sown from the once-in-ageneration combination of overheated Chinese demand and scarce supply. By 2015.

. and this weakens the incentive to make concessions in order to avoid the escalation of a dispute into a bilateral military conflict. resources. (2) countries have private information. professors @ Paris School of Economics. A theoretical prediction of our model is that globalization of trade flows changes the nature of conflicts. we build a framework where escalation to military conflicts may occur because of the failure of negotiations in a bargaining game. The reason for the second result is that globalization decreases the bilateral dependence for any country pair. multilateral trade openness has the opposite effect: Any pair of countries more open with the rest of the world decreases its degree of bilateral dependence and its cost of a bilateral conflict. why is it that globalization. On the theoretical side. The Review of Economic Studies Limited.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Trade Prevents War Resource trading doesn’t prevent conflict Martin et al. http://econ. This is especially true for countries with a high probability of dispute with a local dimension such as disputes on borders. However. We show that a pair of countries with more bilateral trade has a lower probability of bilateral war. and ethnic minorities.fr/sites/default/files/file/tmayer/MMT. 865–900. interpreted as trade liberalization at the global level. Review of Economic Studies (2008) 75. accessed 7/10/13. We then embed this game in a standard new trade theory model. It decreases the probability of global conflicts (maybe the most costly in terms of human welfare) but increases the probability of any bilateral conflict. Mathias Thoenig. and (3) countries can choose any type of negotiation protocol.sciencespo. “Make Trade Not War?”.pdf. 2008 *Philippe Martin. and this results in a higher probability of bilateral war. Thierry Mayer. The structure of this game is fairly general: (1) war is Pareto dominated by peace. has not lived up to its promise of decreasing the prevalence of violent interstate conflicts? We offer a theoretical and empirical answer to this question. chip] The objective of this paper is to shed light on the following question: If trade promotes peace as suggested by the European example.

As Al Qaeda’s attacks to date have shown. without analysis and synthesis. these elements may increase. Studies of the recent fighting in Afghanistan. However. the United States scaled back its human intelligence efforts considerably some years ago. ISBN 1-58487-118-0. Paradoxically. on the other hand. small terrorist cells can execute well-coordinated—and genuinely devastating— surprise assaults despite a vast intelligence network and the proliferation of information technologies. We would do better to develop experienced judgment and learn to become comfortable with uncertainty—with things that we cannot know beyond a reasonable doubt—than to delude ourselves that our technology will deliver all the knowledge we need to achieve victory. for example.62 In other words. especially if opponents use misinformation more frequently as a counter to knowledge-based warfare. 2003 [LTC Antulio J. March. on matters of combat.60 To be sure. the key to fighting a successful war on terrorism is intelligence.bluffs. and institutional diffusion accelerate the growth of terrorism Echevarria. chip] For the United States and its Western allies. chance and uncertainty are personified in irregular forces buoyed by a broad. but that does not mean that knowledge grows by the same percent. therefore. and a multinational membership. a great deal of uncertainty still surrounds a single bit of tactical information of strategic importance. for budgetary and cultural reasons. miscommunication. and we may not have that luxury in an era in which change seems to be occurring at an accelerating rate. Echevarria II. the location of Osama bin Laden. While many of today’s weapons differ significantly from those of a century ago. in fact. US Army War College. “GLOBALIZATION AND THE NATURE OF WAR”. Director of Research @ Strategic Studies Institute. military and law enforcement organizations. show that the principles of fire and movement that enabled soldiers to cross the deadly zone during the First World War . the information they provide is always inadequate. an extensive organizational and operational infrastructure. namely.61 Thus. Strategic Studies Institute. several of the tactical and operational principles that underpin military doctrine still remain valid. globalization and the spread of information technology have made it likely that both sides will generate more—rather than less—chance and uncertainty. linear correlation between information and knowledge. The total amount of information—which includes irrelevant and incorrect information—may well increase by a certain percent. experienced judgment takes time to develop. religion-based ideology. information technologies now deliver more information than ever before to decision makers and their constituencies. knowledge is not solely a function of available information. if transforming. globalization and the spread of information technologies still have not eliminated the elements of chance and uncertainty in war. In some cases. for example. Unfortunately. Despite the existence of a vast technology based intelligence and surveillance network. Yet. Of course. For nonstate actors such as Al Qaeda. one should not act too hastily here. It is often impossible to discern the quality or correctness of information until after the fact—when it can be compared to the way events actually unfolded. Contrary to what pundits have predicted. Merely throwing more information at the problem will not solve it. especially human intelligence. Defense officials have repeatedly asserted that. the elements of chance and uncertainty now manifest themselves through traditional. new thinking has yet to replace old.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Transparency Checks Conflict Transparency doesn’t check conflict. we simply cannot make a direct. Still.

military in particular has wrongly defined the center of gravity as “a source of strength. if those at other locations retaliate by discharging a weapon of mass destruction. a place where energies come together to be redirected and refocused elsewhere.65 Destroying Al Qaeda cells in Europe. destroying such distributed enemies in one location could lead to some extremely undesirable consequences. when this was not the case. Unfortunately. . For decades.64 It was neither a strength nor a weakness.S. but it could be strong—well-protected—or not. or those in other cells. per se.63 Nonetheless. Even with a redefinition. therefore. Clausewitz’s center of gravity concept depends on the condition that the enemy is connected enough to act as a single entity. at least one fundamental concept of Western military doctrine—Clausewitz’s center of gravity— has some serious limitations and may have outlived its usefulness. By implication. the concept did not apply. however. the concept may have only limited applicability in a globalized operational environment where opponents can fight in vast. or cluster. distributed networks without necessarily being linked to one central authority. or to one another. a globalized operational environment presents fewer cases in which enemies function as a single entity.” Yet. model in which many cells exist. but the members of any particular cell do not necessarily know one another. the U. Al Qaeda’s global terrorist network adheres to the cellular. If one member is caught. will not necessarily cause those in Indonesia to collapse.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade have proven just as essential against entrenched Taliban and Al Qaeda forces. In fact. Clausewitz’s original notion of the center of gravity was more akin to that of a focal point. the other members and other cells are not in danger.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Democracy Checks Democratic states still go to war. 2004. For example. By concentrating on Ricardo's valuable insight.tant revisions to standard trade theory into the commercial peace debate (Schneider and Schulze 2003). associate professor in international relations theory and international political economy @ UT Austin.2 Because some groups see their incomes decline from international trade. Gelpi and Grieco 2003). One strand of the interdependence literature has responded to this shortcoming by examining how democracy conditions the effects of commerce on conflict (Brawley 1993. which demonstrates that economies increase their aggregate consumption possibilities (or economic growth more generally) through specialization and trade.. and determine policy. “Peace through Trade or Free Trade?”. little research has been conducted on how these domestic distributional consequences of commerce may also shape the domestic politics of decisions for war and peace. the standard hypotheses focus on these aggre. 48. they are unlikely to support open markets.jstor. scholars have challenged these claims for failing to elaborate a model of domestic politics that links com. Accordingly. the literature overlooks how trade based on comparative advantage also creates societal coalitions opposed to further integration (e. 2004 [Patrick J.4 Moreover. Simmons 2003). No.ciples of comparative advantage.elites vote to maintain their positions of power. Rogowski 1989). 547-572. The ability of commerce to promote peace may be restricted to democratic states because the groups most hurt by interruptions in commerce can successfully lobby their governments in these polities for more peaceful foreign policies. Mansfield and Pollins 2001.g. societal interests in trade and peace. Aug. Fearing the aggregate costs of economic disruption. Free trade also doesn’t check irrational states McDonald. Both the Heckscher-Ohlin and Ricardo-Viner frameworks demonstrate that economic integration redistributes income within a domestic society.viduals and state-society interactions to explain foreign policy behavior (Moravcsik 1997). http://www. Papayoanou 1999. Schneider and Schulze 2003.merce. aggregate these economic interests. chip] Despite substantial empirical evidence for these hypotheses. McDonald. Barbieri and Schneider 1999. The Journal of Conflict Resolution. this claim helps motivate the opportunity cost hypothesis. Such a conclusion casts doubt on the proposition that trading sectors in society will always win out among competing domestic interests and possess the political capacity to constrain an aggressive foreign policy. Sage Publications. Whereas regime type . The opportunity-cost hypothesis implicitly adopts a pluralist model of domestic politics that fails to acknowledge that the structure of domestic institutions can privilege portions of society preferring a closed trad. Most of the literature draws on Ricardo (1821/1973) and the prin.. 4.org/stable/4149808.' Consequently. The neglect of domestic politics stems in part from a failure to incorporate impor. pp.gate welfare benefits to explain any link between commerce and peace. the process by which these trading interests translate preferences for maintaining an open economy into foreign policy outputs that include both an open trading system and a more pacific orientation in foreign policy must also account for the structure of domestic institutions that mediate societal conflict. and the state with the creation of a pacific foreign policy (Stein 1993. societies will lobby the governments for a pacific foreign policy.ing system and that the state possesses an independent capacity to arbitrate among and shape these interests. Vol. This oversight is particularly significant given the concentration of liberal international relations theory on the behavior of indi.

To prevent war.ance of power would necessarily empower broader elements of society and simulta. The elimination of protective commercial policies empowers societal groups most opposed to war and constrains the ability of governments to redistribute the costs of war onto groups outside its ruling coalition. 547-572. 1870. Historically. http://www. the . 2004. Together. Because tariffs tended to shield noncompetitive sectors and shift the distribution of wealth in a society toward these groups and away from consumers. it may not capture all of the variation across economies.jstor. chip] This section argues that a neglected fifth variant of the commercial liberalism. a transformation of the domestic bal. These classical scholars connect the domestic pol.44-45.5 This possibility suggests the need to explore the independent effects of protection on conflict.9 The consequences of free trade on the domestic distribution of power then shaped the domestic distributional implications of war. 1870) and Schumpeter (1919/1951) built these explanations from a broader liberal model of war. Aug.cies and not simply an increase in aggregate economic integration should bode well for peace. Vol. 2. that is.7 The next step linking trade and peace focused on the domestic distributional impli. the costs of war generally fall on the poorer elements of society who possess no interest in conflict.. “Peace through Trade or Free Trade?”. Just like restrictive commercial poli.org/stable/4149808. In this second-image variant of the commercial peace hypothesis.8 By removing tariffs and encouraging free trade. The elimination of trade restrictions undermined the ability of the state and protected sectors of the economy or the domestic groups most responsible for war to shift the burdens of public finance onto disorganized members of society who were benefiting most from open international markets. 1. Behind much of the clamor for free trade in the classical literature was a strong opposition to monopolies in the domestic economy. 48.429) argued that wars and "war scares" allowed governments to postpone domestic reforms that would necessarily expand individual liberty and limit the role of government in domestic life. pp.mercial policy to explain how trade promotes peace. these twin pressures suggest that the adoption of free trade poli. import-competing sectors have been able to lobby and obtain protectionist legislation in democracies. No.motivated by the writings of Cobden (1868. the political motivation behind free trade was just as often domestic as it was international. Cobden (1868.itics of international conflict with the domestic distributional consequence of com. The Journal of Conflict Resolution. McDonald. Both Cobden (1868. to promote peace.6 Just as a state goes to war to extend its influence in the international system or eliminate a threat to its security. Free Trade Free trade policies stabilize otherwise belligerent aspects of domestic life McDonald.neously erode regulatory protection for merchants. For example. 4.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker provides one means to characterize state-society interactions. Schumpeter (1919/1951). war simultaneously creates opportunities for a government to redistribute income toward its political supporters and solidify its domestic position. associate professor in international relations theory and international political economy @ UT Austin.cies.cations of commercial policy. 2004 *Patrick J. which holds that the external costs and benefits of waging war are inseparable from its domestic costs and benefits. societies therefore need mechanisms to monitor and punish their government's effort to utilize foreign policy for domestic political gain. and standard trade theory-offers important insights into how international commerce shapes the domestic politics of war. 1870). Sage Publications.

bution of income.butional issues that often lie at the heart of a liberal theory of conflict and creates a foundation to understand the processes by which these economic pressures shape foreign policy.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade ability of commerce to promote peace depended crucially on trade's ability to alter the distribution of domestic political power. These classical arguments find support in standard trade theory. In what follows. This possibility links international commerce with domestic distri. 1870) and Schumpeter (1919/195 1) to identify a series of mechanisms emanating from both soci. I build on the insights of Cobden (1868. Free trade and not necessarily trade was the key to peace. trade simultaneously alters the domestic distri.ety and the state whereby free trade enhances the prospects for peace between states. While increasing the aggregate income of an economy. .

do not test models in which trade and war are both endogenous. The quantitative impact of trade is surprisingly large for proximate countries (those with a bilateral distance less than 1000 km). 2008 *Philippe Martin. 2002). Bond. 1991). Polachek. 1996. those for which the probability of a conflict is the highest.multilateral trade costs remain the same Martin et al. some recent studies have found a positive relationship (see Barbieri. the main debate is between the “trade promotes peace” liberal school and the neoMarxist school which argues that asymmetric trade links lead to conflicts. Polachek. accessed 7/10/13. 2003. We first test this hypothesis.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Costly Wars Free Trade doesn’t increase the cost of war.flict by around 20% for proximate countries.sciencespo.cantly with a bilateral conflict. 1980. Robst and Chang. Second. and. Van Creveld. They. Review of Economic Studies (2008) 75. It is consistent with the changing nature of war as discussed by historians (Keegan. 1986.fr/sites/default/files/file/tmayer/MMT. professors @ Paris School of Economics. Kapstein. This fits well with the stylized fact depicted by Figure 2. for more distant countries. 1984. however. Our results are robust to these different estimation strategies.g. We address the endogeneity issue by controlling for various codeterminants of conflict and trade. From a theoretical point of view. we find that bilateral trade costs indeed increase signifi. From an empirical point of view.3 In economics. We estimate the quantitative effect of the globalization process of the past 30 years that is characterized by expansion of both bilateral trade flows (with a negative impact on the probability of conflict) and multilateral trade flows (with a positive impact on this probability). the effect of globalization on their bilateral relation has been very small. 1999. We find that its net effect has been to increase the probability of a bilateral con. The related literature ranges from political science to political economy. 1999). However. multilateral trade costs do not increase significantly. 1995. finally. Oneal and Russet. The question of the impact of trade on war is an old and a controversial one among political scientists (see Barbieri and Schneider. focus on the reverse causal link. however. recent studies in political science test the impact of bilateral trade (in different forms) on the frequency of war between country pairs. The Review of Economic Studies Limited. 865–900. that is on the effect of war on trade. However. related empirical papers on the issue are recent papers by Blomberg and Hess (2006) and Glick and Taylor (2005). They control for . Using a gravity-type model of trade. by implementing an instrumental variable strategy. 1999. Mathias Thoenig. “Make Trade Not War?”. Many find a negative relationship (see. we test the predictions of the model related to the contradictory effects of bilateral and multilateral trade on conflict. Mansfield. http://econ. These papers. The main difference between these two positions comes from the opposing view they have on the possibility of gains from trade for all countries involved. by including country pair fixed effects and time effects. The mechanism at work in our theoretical model rests on the hypothesis that the absence of peace disrupts trade and therefore puts trade gains at risk.pdf. e. chip] We test the theoretical prediction that bilateral and multilateral trade have opposite effects on the probability of bilateral military conflicts on the 1950–2000 period using a data set from the Correlates of War (COW) project that makes available a very precise description of interstate armed conflicts. Thierry Mayer. This strongly suggests that conflicts have become more localized over time as the average distance between two countries in military conflict has been halved during the 1950–2000 period. for recent surveys). However.

fr/sites/default/files/file/tmayer/MMT.pdf. Given that these conflicts are certainly the most costly in terms of human welfare. professors @ Paris School of Economics. what matters ultimately is the geographical structure of trade and its balance between bilateral and multilateral openness. the first to derive theoretically the two-sided effect of trade on peace (positive for bilateral trade and negative for multilateral trade) and to empirically test this prediction. To our knowledge.sciencespo. “Make Trade Not War?”. an increase in trade between two countries pacifies relations between those but increases the probability of conflict with third countries.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade the standard determinants of trade as used in the gravity equation literature. accessed 7/10/13. because it increases the opportunity cost of bilateral war. to our knowledge. We have shown that even in a model where trade increases welfare and war is Pareto dominated by peace. Bilateral trade. This last point. increasing the probability for a third party conflict Martin et al. http://econ. is important. Mathias Thoenig. deters bilateral war. From this point of view. 2008 *Philippe Martin. Thierry Mayer. Our econometric analysis validates this prediction using a large number of alternative specifications and empirical strategies. Multilateral trade openness. . our paper is. however. 865–900. Trade globalization also affects the nature of war: Multilateral openness increases the probability of local wars but should deter global conflicts. Indeed. Review of Economic Studies (2008) 75. The Review of Economic Studies Limited. chip] Our paper is the first. higher trade flows may not lead to more peaceful relations. this is not a small achievement. a logical consequence of our results but that we cannot test directly. weakens the incentive to make concessions during negotiations to avert escalation and therefore increases the probability of war between any given pair of country. because it reduces this opportunity cost with any given country. to highlight the opposite effects of bilateral and multilateral trade on the probability of war and to base the empirical analysis on testable predictions generated by a theoretical model. More trade interdependence reduces the opportunity cost of wars.

accessed 7/10/13. 865–900. world trade increased rapidly. This vision. even taking into account the increase in the number of sovereign states. Mathias Thoenig. during which trade flows increased dramatically. 2008 *Philippe Martin. the correlation between trade openness and military conflicts is not a clear cut one. professors @ Paris School of Economics. . at the end of the 19th century. The first era of globalization.fr/sites/default/files/file/tmayer/MMT. which can partly be traced back to Kant’s Essay on Perpetual Peace (1795). After World War II. was a period of lower prevalence of military conflicts. Then.pdf.sciencespo. Review of Economic Studies (2008) 75. while the number of conflicts decreased (although the risk of a global conflict was obviously high). Thierry Mayer. There is no clear evidence that the 1990s. http://econ. “Make Trade Not War?”. has been very influential: The main objective of the European trade integration process was to prevent the killing and destruction of the two World Wars from ever happening again. culminating with World War I.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Data Trade doesn’t prevent war – their “data” is unsubstantiated Martin et al. chip] Does globalization pacify international relations? The “liberal” view in political science argues that increasing trade flows and the spread of free markets and democracy should limit the incentive to use military force in interstate relations. that during the 1870– 2001 period. was a period of rising trade openness and multiple military conflicts. 1 Figure 1suggests 2 however. the interwar period was characterized by a simultaneous collapse of world trade and conflicts. The Review of Economic Studies Limited.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Bad – Jobs .

the Mexican economy has failed in its promised to create good quality jobs and ¶ to address the erratic and feeble growth of workers income.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Generic Increased trade makes employment precarious. 33)¶ In fact. in part. Polaski. each country or region should do what it does best and then trade its surplus output to other countries with a minimum of restriction. Employment has become increasingly precarious overall. ¶ the agricultural sector has suffered a large and steady loss of employment. where they're still caught up in ancient post-mercantilist ideology.org/page/-/BriefingPaper308. Unfortunately . University of California at Berkeley. AS) Free trade isn't the only thing ruining America. For example.¶ Such is the foolish logic that presidents of both parties have used to sell free trade agreements to Congress. and Vaughan 2003. 10. shortly after the agreement took effect (Papademetriou..-Mexico trade and job displacement after NAFTA. Economics. accessed 7/1/13. Institute for Policy Studies. as Mexico’s dependence on global imports grows.epi.” http://www.S..S.” http://www. Free trade kills U.pdf. Nov. 10 (William A. “Free Trade: A Corporate Scam." In other words. Connecticut. NAFTA had devastating consequences for the Mexican economy (Salas 2006 and Faux 2006). subsidized corn from the United States after corn tariffs were ¶ liberalized. (Salas 2006. AS) NAFTA proponents claimed that the trade agreement would generate a growing middle class in Mexico.ips-dc. . ¶ NAFTA also provided convenient cover for conservative governments in all three nations to undertake economic ¶ reforms in order to gain economic “competitiveness” in the treaty’s wake.¶ Other economists work for universities. 8. Mexico should send avocados to Maine and get blueberries in return. contractionary cutbacks in government spending). Economic Policy Institute. They're surely not going to sound the alarm. At least one expert has argued that this crisis ¶ was caused. former state representative and a former mayor of Norwalk. 11 (Robert E.. Well.3 million jobs ¶ in the agricultural sector as a result of the flood of cheap. “Heading South: U. Mexico experienced ¶ a peso crisis in 1994 that pitched the economy into a steep recession. That way everyone makes a profit. largely the very same employers who benefit from cheap foreign or imported labor. that's their job.¶ The most obvious reason is that so many jobs have gone overseas. But their ¶ claims proved incorrect: ¶ Contrary to NAFTA’s stated objectives. ¶ workers in Canada suffered as a result of massive cutbacks in government spending at the provincial and national levels ¶ that arose when conservative Canadian governments touting the need to maintain “competitiveness” used North American ¶ economic integration to begin a race to the bottom in government spending and taxation (Campbell 2006). accessed 7/2/13.4¶ Further. you learn the mantra of "comparative advantage. by a wave of speculative foreign investment in Mexico in advance of the signing of the agreement ¶ (Blecker 1997). 1-23). Millions of jobs were lost in the wake of the peso crisis (and the ensuing International Monetary Fund ¶ stabilization plan. Early in Econ 101. and which Congress buys all too often. Free Trade Scott.org/articles/free_trade_a_corporate_scam. but it's a biggie.D. which required massive. 9/19/11. Audley. and real salaries remain below the levels of ¶ the early 1990s. You'd think economists might feel a duty to explain to our leaders what's gone wrong. but most economists these days work for industry. Mexico also lost 1. Ph. jobs – anyone who tells you otherwise is biased. Collins.

from $75 billion in 1993. a decision against opening a new gravel quarry in Ontario because of the likely effect on water and farmland. they pay big money to lobbyists and to political campaigns to get it. but the companies don't care. They're not our brothers' keepers. American workers aren't their responsibility. It's heavily subsidized by Congress and loves selling its low-cost products tariff-free in lands where no competing subsidy exists.S.¶ Expanded to the grand scale of world trade. accessed 7/2/13. Institute for Policy Studies. Free trade has permanently eroded our sense of what people can do together for the common good. Mexico. The AFL-CIO in February challenged the benefit the TPP offers to workers. which is leading the TPP charge. In this same period.org/staff/manuel. Canada's largest city. 20 per cent of people are now employed in precarious. Manuel Perez-Rocha. a mere 1. 13 (Kristen. Two current examples: Whirlpool is moving more production to Mexico and GE is closing its last light bulb plant in America.¶ The United States. NAFTA has been in place for 20 years and the promised trickle down benefits have not been realized by communities. GDP per capita in Mexico decreased by 3. which is among the worst performance in Latin America. But they do crave cheap labor anywhere they can find it. Executive Director at Washington Fair Trade Coalition. unstable or part-time jobs. has also suffered under NAFTA. Felipe Calderon's presidency has been characterized by the slowest growth since 1954.S. 2014. no winners¶ In the past 10 years. not a single notable social program has been introduced or expanded. After all. these actions have led to our rampant unemployment. But NAFTA hit Mexico very hard again during the 2008-2009 financial crisis given Mexico's dependency on the United States. They answer to investors. from Poland to Palau. Raul Burbano.5-billion worth of legal suites by corporations that are permitted to sue countries under NAFTA for potential profits if blocked by health and safety or environmental laws from conducting business as usual. AS) Since NAFTA was signed almost 20 years ago. This type of employment has increased by 50 per cent in the past 20 years since NAFTA was signed. ¶ Agribusiness is the same. corporation challenging a moratorium on natural gas fracking in Quebec.58 per cent in average from 2007 to 2011. What's more. Current suits include a U. worsening income inequality."¶ In Mexico millions of small farmers were displaced when NAFTA came into force in 1994 creating a massive push for migration to the United States.¶ Three nations. to $540 billion today (in nominal terms). http://www. This healthy protection is what free trade agreements seek to overcome. "the growth in the trade deficit with Mexico has cost the United States . NAFTA promised a flourishing North American economy that would benefit all.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade what is at stake--always--is greed. That may drive local farmers out of business. increased food insecurity (in particular in Mexico). and ecosystems on the point of breaking.¶ Manufacturers and marketers don't know avocados from blueberries. In fact." Since the implementation of NAFTA. and. Free trade agreements shed jobs for every country involved.ipsdc. A new United Way Toronto report found that in and around Toronto. all three North American countries have seen good jobs vanish.¶ Most nations have imposed tariffs or quotas to protect local industries against such cheap foreign competition.000 manufacturing jobs. and an unsustainable trade deficit. a consultant to Oxfam International on trade issues in the Central America. In Jan. public services weakened through underfunding or offloaded to the private sector.¶ Canada is also facing over $2. and many others "coming down the pipeline. trade deficit "has increased dramatically under NAFTA -. Beifus et al.71 per cent. a depressed economy. Canada has lost 500. between 2007 and 2010. says the AFL-CIO. according to World Bank indicators. citing that the U. a court decision to annul a patent by Eli Lilly.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker nearly 700." The AFL-CIO is calling for a Global New Deal that promotes growth "with equity." Free Trade .000 net jobs. protect their health and safety and foster sustainable development.

Free trade has undercut job growth – statements prove.S.S.huffingtonpost. By 1997.000 total -.900 jobs.S. like NAFTA. economy hemorrhaged 2. Canada and Mexico. U. manufacturing sector that has suffered most mightily from NAFTA. And last year.¶ According to a report by Economic Policy Institute economist Robert Scott. auto industry. proponents said it would eventually create jobs for the U.S. held a $1.¶ It's the U. 11 (Maxwell. economy. called U.” http://www.¶ Jobs continue to be lost to NAFTA today. a new report estimates. The Huffington Post. 12 . too.S.S. the U. tore down trade barriers between the U.S. the growth of Mexican auto exports to the United States alone created more Mexican jobs -. And while the states with the largest total number of job losses. Mexico's trade surplus now hovers around $97.2 billion. KORUS. it's actually manufacturing-heavy states to the north. Specifically.S. Despite the agreement being considered a boon for Mexico. entitled "Heading South: U.6 million jobs.900 U. Indiana and Kentucky.000 Jobs Because Of NAFTA. Economy Lost Nearly 700. the report found. In 1993.¶ The U. the country's economy grew only 1. is currently considering a similar trade agreement with South Korea. jobs have been "lost or displaced" because of the agreement and the resulting trade deficit.S. the tides had turned. the American worker only has hundreds of thousands of job losses to show for it. signed just three years after the collapse of the Soviet Union. either. exports to Mexico supported 791. it's not even close.47 million U. The New York Times reported in 2009.400 -.com/2011/05/12/nafta-job-loss-trade-deficitepi_n_859983.S. economy has lost 116. the number of jobs lost to NAFTA looks minimal when placed against the havoc freaked by the financial crisis. Gemma.415.of the jobs lost to the agreement.S. do hug the southern border." an estimated 682.than the entire U. according to CNNMoney. and motor vehicle and parts workers accounted for 15 percent of job losses. which supported 29. jobs that would be necessary without the imports resulting from NAFTA. before the signing of NAFTA. political consultant.¶ 17 years later.¶ The EPI's calculation of 682. that have lost the largest share of jobs to Mexico. Free Trade Strachan.S. as all fifty states have lost jobs as a result.S. Last year.¶ Still. those making computer of electronic parts have accounted for 22 percent of all job losses.statistics prove free trade kills jobs. AS) When the North American Free Trade Agreement was first signed in 1994.¶ Perhaps the most drastic switch post-NAFTA has been in the two country's trade deficit. the U. In the years 2007-2010.900 jobs lost to NAFTA takes into account jobs created as a result.6 billion.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Statistics/Statements NAFTA goes the other way . at the height of the crisis.-Korea Free Trade Agreement (KORUS FTA).6 percent per capita on average between 1992 and 2007. EPI Says. 7/12/11. accessed 7/1/13. and Mexico laid claim to a much larger surplus of $16.6 billion trade surplus over their neighbor to the south. It's just that those jobs created pale in comparison to the 1. Business Editor at the Huffington post.html. could similarly displace American jobs.8 percent -. for example.30. Only in 2008. alone accounting for 60. As of 2010.¶ The historic agreement. such as Michigan. California and Texas.¶ Job losses haven't been limited to certain geographic regions. the U.400 as a result of the trade deficit created by NAFTA. “U. making trade and investment easier for businesses without allowing for the cross-border movement of labor.Mexico trade and job displacement after NAFTA.400 jobs. EPI warns.S..

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

[Paul B, Spring 2012, “Free Trade: Exporting Jobs, Importing Aliens,” The Social Contract Journal, Volume 22: Number 3, pg N/A, AS]
On the other side of the bed was an interesting mix too. Democrat U.S. Senator Sherrod Brown (American Conservative Union rating zero percent; Americans for Democratic Action rating 100 percent) represents the blue-collar state of Ohio. He asserts: “I continue to believe it is a dangerous mistake to pursue the same kind of trade deals that ballooned our deficit and led to massive job loss. We simply cannot keep barking up this tree as American companies fold and American workers face prolonged unemployment. Until we address China’s manipulation and make decisions to reduce our trade deficit, I see no reason to pursue more NAFTA-style free trade agreements.”14¶ Populist political activist Ralph Nader has opined: “Millions of manufacturing jobs in this country have been shipped overseas. This transfer was supposed to be part of the ‘win-win’ process of free trade. But 27 straight years of growing trade deficits makes one wonder: who’s winning?” The well-known consumer-advocate also says, “Someday the Pollyanna belief that the U.S. economy always replaces the jobs it loses overseas with new jobs here, as we keep racing ahead of other countries with modern technology, may run into a contrary riptide that no set of spurious statistics can obscure.”

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Job Displacement A rising trade deficit results in job displacement.

Free Trade

Scott, Ph.D. Economics, University of California at Berkeley, 11
(Robert E., 9/19/11, Economic Policy Institute, “Heading South: U.S.-Mexico trade and job displacement after NAFTA,” http://www.epi.org/page/-/BriefingPaper308.pdf, accessed 7/1/13, AS) The United States had a small $1.6 billion trade surplus with Mexico in 1993, the year before NAFTA took effect. By ¶ 1997, the United States had developed a $16.6 billion trade deficit with Mexico, which increased to $97.2 billion in ¶ 2010, as shown in Table 1. Between 1997 and 2010, the U.S. trade deficit with Mexico increased $6.2 billion per year, ¶ or 14.6% per year.¶ This paper estimates the impact of that change in trade on employment by calculating the labor content of changes ¶ in the trade balance—the difference between exports and imports. For example, each $1 billion in U.S. auto parts ¶ exported to Mexico supports U.S. jobs, but each $1 billion in autos and trucks imported from Mexico displaces the ¶ workers who would have been making them in the United States. On balance, the net employment effect of trade flows ¶ is determined by changes in the trade balance. Growing trade deficits usually result in job displacement.¶ The employment impacts of trade deficits are assessed using an input-output model that estimates the direct and ¶ indirect labor requirements of producing output in a given domestic industry. The model includes 202 U.S. industries, ¶ 84 of which are in the manufacturing sector.9¶ The model estimates the amount of labor (number of jobs) required to ¶ produce a given volume of exports and the labor displaced when a given volume of imports is substituted for domestic ¶ output. The net of these two numbers is the estimated number of jobs displaced by changes in the trade balance, holding ¶ all else equal. ¶ U.S. exports to Mexico in 2010 supported 791,900 jobs, but U.S. imports displaced production that would have ¶ supported 1,474,800 jobs, as shown in the bottom half of Table 1. Therefore, the $97.2 billion U.S. trade deficit with ¶ Mexico in 2010 displaced 682,900 jobs.10 Since the United States had a small trade surplus in 1993 (not shown), all of ¶ those jobs were displaced between 1993 and 2010.11 On average, 40,200 jobs have been lost or displaced per year since ¶ NAFTA took effect.12¶ U.S. jobs displaced by the trade deficit with Mexico are a net drain on employment in trade-related industries, ¶ especially those in the manufacturing sector. Even if increased demand in other sectors absorbs all the workers displaced ¶ by trade (an unlikely event), job quality is likely to suffer, as many non-trade-related industries, such as retail and home ¶ health care, pay lower wages and have less comprehensive benefits than trade-related industries. Furthermore, the 116,400 U.S. jobs displaced by the $6.4 billion increase in the deficit between 2007 and 2010 are ¶ counted as job losses because the U.S. labor market was in recession between 2007 and 2010. Since the U.S.-Mexico ¶ trade balance shrank in 2008 and 2009, all of these jobs were lost in 2010. Given the excess capacity in the economy in ¶ 2011, and the fact that short-term interest rates are close to zero, the 116,400 jobs displaced by trade since the recession ¶ began likely to be net job losses for the entire economy. ¶ This loss of 116,400 jobs is large relative to the increase in the trade deficit between 2007 and 2010. It is explained, ¶ in part, by a decline in the deficit in crude oil and petroleum products, and a proportionately larger increase in the trade ¶ deficit in manufactured products (which are more labor intensive) in 2010 and by related changes in some price ¶ deflators. Falling prices for some manufactured goods expanded the real, non-oil trade deficit (dominated by trade in ¶ manufactured products), which increased about $28 billion (versus the $6.4 billion increase in the nominal deficit). ¶ There were large increases in the nominal trade deficit in a few manufactured goods

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker

Free Trade

(e.g., non-ferrous metal products, ¶ computer and peripheral products), which also experienced large price declines that magnified the impact of these shifts ¶ on real trade flows. More trade means more deficits and more displaced jobs.

Scott, Ph.D. Economics, University of California at Berkeley, 11
(Robert E., 9/19/11, Economic Policy Institute, “Heading South: U.S.-Mexico trade and job displacement after NAFTA,” http://www.epi.org/page/-/BriefingPaper308.pdf, accessed 7/1/13, AS) The growing U.S. trade deficit with Mexico has displaced a large number of jobs in the United States and is a significant ¶ contributor to the current crisis in U.S. manufacturing, which lost 5.6 million jobs between 2000 and February 2011 ¶ (BLS 2011). U.S. trade with Mexico in 2010 cost 682,900 U.S. jobs, and three-fifths of the jobs displaced (415,000) ¶ were in the manufacturing sector. ¶ NAFTA proponents claimed that falling tariffs would generate rapidly growing exports and a sustained and ¶ growing trade surplus with Mexico. In fact, the United States has experienced steadily growing trade deficits with ¶ Mexico. Despite this experience, proponents of the U.S.-Korea Free Trade Agreement have claimed that growing exports ¶ will support 70,000 U.S. jobs. The job displacement that arose from U.S. trade deficits with Mexico after NAFTA took ¶ effect provides powerful evidence that the KORUS FTA is likely to lead to growing U.S. trade deficits and job displacement. Every FTA proves that jobs are lost by increased trade.

Scott, Ph.D. Economics, University of California at Berkeley, 13
(Robert E., 2/13/13, Economic Policy Institute, “Signing trade deals is a terrible jobs strategy,”http://www.epi.org/blog/signing-trade-deals-terrible-jobs-strategy/, accessed 7/2/13, AS) As part of his proposals to spur job growth, President Obama promised in last night’s State of the Union address to complete negotiations on the proposed Trans Pacific Partnership (a proposed free trade agreement (FTA) with at least eight other countries in Asia and Latin America), and announced new talks on a comprehensive FTA with the European Union. This is a shame, because chronically high unemployment is a real crisis, while trade agreements are a fake solution.¶ The issue is simple: it is trade balances – the net of exports and imports – that can affect jobs. Unless trade agreements promise to reduce our too-high trade deficit, they will have no positive effect on jobs. Even worse, past trade agreements have actually been associated with larger trade deficits in their aftermath.¶ This is not some proprietary EPI stance on trade – the economics textbook teaches that, as Paul Krugman has summarized, “Trade Does Not Equal Jobs.” Responding (in 2010) specifically to claims that the Korea FTA could be a driver of recovery, he pointed out that in macroeconomic terms, the United States had too little spending on domestically-produced goods and services, with total spending (Y) defined by:¶ Y = C + I + G + X – M¶ Where C is consumer spending, I is investment spending, G is government purchases of goods and services, X is exports, and M is imports. He noted that while trade agreements lead to higher X, they also lead to higher M. Exports support demand for domestically produced goods, so higher X increases employment. However, the growth of imports reduces demand for domestically produced goods, which reduces domestic employment. Professor Krugman claimed that “on average, they’re a wash.”¶ In the real world, FTAs have hurt U.S. employment. The United States had a small trade surplus with Mexico in 1993, before the North American FTA took effect. In 2010, the U.S. trade deficit with

S.8 billion.¶ Some might argue that because the EU is a rich region. and they have tremendous influence on the politics of trade.8 billion to $115.2 billion. alone. And this actually points to another universal weakness with FTAs – they’re essentially a long menu of giveaways and protections to various corporate sectors yet leave genuinely crucial issues like protecting countries from import surges caused by disequilibrium exchange rates off the table. and yet U. Trade with the EU hurt our economy last year. Korea FTA would “support 70. to meet and answer to his visionary self.S. U. such as the Business Roundtable and the Chamber of Commerce.S.¶ And the permanent normalization of trading relations with China in 2001 led nearly instantly to a steep rise in the bilateral U.¶ More FTAs will only slow the already fragile recovery and further depress middle class wages that the president so eloquently described last night.S. trade deficits from blowing up – support exports and jobs? The simple answer is that he’s only telling half the story (about exports) and ignoring the bad news about imports. the trade-deal salesman. an increase of ($15. trade deficit with the EU increased from $99. the proliferation of FTAs. yes. 2012. largely because the Euro’s weakness led to increased competitiveness for EU exports. 15. manufacturing between 2001 and 2011.¶ Why is the president claiming that FTAs – especially those with no macroeconomic safeguards to keep U. and foreign MNCs carried out 68 percent of all U.” That agreement took effect on March 15. .S. These deficits displaced 2.S. it should be a good market for U. exports to Korea fell last year. Last year. jobs.S. MNCs and their allies. why do these FTAs have such irresistible political momentum no matter who is in the White House? It surely doesn’t hurt that the biggest beneficiaries of these FTAs are multinational companies (MNCs).¶ It’s sad to see that President on the same side as the republican Ignorance Caucus. goods trade in 2010 (the last year for which we have data). meaning that Korea trade reduced demand for domestically produced goods in 2012 and cost the U. That was larger than our entire trade deficit with Canada and Mexico.9 percent). our NAFTA partners (a combined deficit of $93.000 American jobs from increased exports alone.S.1 in 2012). and the growth of outsourcing are three of the most important causes of the historically high share of corporate profits in U.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Mexico totaled $97. The President claimed that the U. wages over the past decade that the president bemoaned last night. and the trade deficit increased. which displaced 682. exports.900 jobs.S./China trade deficit – interrupted only temporarily by the Great Recession.S. It’s time for Obama. are big supporters of FTAs. right? Not lately.¶ More importantly. the U. which does its best to hide unpleasant truths from the public and to suppress research on issues ranging from global warming to the impacts of gun ownership to. the economics of international trade.1 million jobs in U.S. and globalization.7 billion. GDP and flat U.S.

153 textile and apparel plants in North Carolina employing 233. North Carolina is one of the southeast states that had a large number of textile companies. and racked up an annual trade deficit with China of $273 million in 2010. The combination of China's 2001 admission to the World Trade Organization (WTO). and they never recovered. This article will examine the impact of free trade with China as documented in two of the annual reports submitted to Congress by the bi-partisan.html. there were 2. president of the San Diego Electronics Network. more than 10 percent of the U. The textile industry by comparison had only lost 63% of jobs and 32% of plants from 1996 to 2006.-China Economic and Security Review Commission (USCC).¶ During the period of 2001-2007. grant of Most-Favored (Trading) Nation status that lowered most tariffs on Chinese imports. North Carolina's manufacturing economy was made even more vulnerable by its concentration in the import-sensitive sectors of textiles. S.S. Huffington Post. up from $83. The USCC report stated:¶ The accelerating decline in North Carolina's manufacturing employment is due in large measure to increasing competition from imports mostly from China. the number and proportion of jobs in the North Carolina services sector increased.8 million in 2000. Between 2004 and 2006. and furniture."¶ According to the Social Science Research Institute (SSRI) of Duke University in North Carolina.000 manufacturing companies. textile industry dropped from the worlds second in basic manufacturing industries in 1991 with $244 billion in sales. down to third in 2002 with $60 billion in sales. apparel. battered North Carolina's textile and apparel industries.S.000 North Carolina workers were certified by the Trade Adjustment Assistance program as having lost jobs to trade. take-home pay isn't as much as they were making at Pillowtex.5 million manufacturing jobs. AS) Since the year 2000. accessed 7/1/13.¶ The 2007 report included a case study of the local impact of trade with China on North Carolina. the United States has lost over 5. nearly 50.¶ The North Carolina Employment Security Commission's Labor Market Information Division followed the employment prospects of 4. and for those who have. in part because some of the displaced workers were able to find only part-time jobs that often do not offer benefits. According to the National Council of Textile Organizations.¶ Because a greater proportion of North Carolina's workforce had manufacturing jobs than any other state. Nash-Hoff. S. This shift put downward pressure on wages because manufacturing historically paid substantially higher wages than the services sector.715 people in 1996.755.¶ "Trade agreements can profoundly ." The article reported that North Carolina has been the most impacted state in the nation by layoffs due to trade. North Carolina's workforce was more vulnerable to competition from imports than the workforces of other states. By 2006. The shift also reduced the number of workers receiving such fringe benefits as retirement and health insurance. 12 member U. 8/5/11. markets for its textile and clothing exports.S.” http://www.huffingtonpost.com/michele-nashhoff/how-free-tradeagreements_b_919480..Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Competitiveness Free trade makes US industries not competitive killing jobs – North Carolina proves.. and the subsequent U. total of 387. “How Free Trade Agreements Lead to Job Loss and Wealth Gaps. three years after they lost their jobs. 11 (Michele. particularly on American workers. which gave it quota-free access to U. the U. "About 40 percent of the laid-off workers had not yet found work. almost 39. These escalating trade deficits with China have far-reaching effects. which was the largest mass layoff in North Carolina history.820 workers laid off from bankrupt Pillowtex in 2003. the apparel industry had experienced a 70% decline in jobs and 55% loss of plants.

national sovereignty. international trade policies: “The problem is not that the government is too big because it tries to do too much.”¶ Former U.S. sovereignty. nationality or immigration status. 2000.”2¶ • American Hotel and Lodging Association: “*our+…primary mission is to allow employers facing shortages of semi-skilled and unskilled (‘essential worker’) labor to hire workers from abroad.”3¶ • United Food and Commercial Workers (UFCW): On June 10. political consultant. 12 [Paul B. the comprehensive trade obligation the U." Free trade only serves special-interest groups leaving most industries behind costing jobs. job growth policies — and U. Its membership includes over 800 chief executives. pg N/A. we care about union cards. While trade agreements that lower import barriers among America's trading partners have the potential to benefit American exporters. “Free Trade: Exporting Jobs. International Secretary-Treasurer Joe Hansen said. "hundreds of small towns throughout North Carolina impacted by plant closures are dying. stealing jobs from the working class.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade affect state and regional economies and particular industries. and representatives of the media. numerous high-ranking officials from regional and international organizations. and the net effect of trade with China since its accession appears to be negative overall for North Carolina's economy. has over a thousand pages of fine print—filled with favors . Volume 22: Number 3. Importing Aliens.”6¶ Wall Street bankers. Consider:¶ • National Association of Manufacturers: “The United States should not place artificial quotas or restrictions on employers’ ability to hire or move people as needed.¶ And it’s a broad coalition of special interests supporting “free trade” tactics that benefit the few at the cost of the many. advocate tearing down America’s borders. “free trade” treaties give off the sweet smell of success but really have nothing to do with free or fair trade: they are managed trade arrangements. Their weaponry includes so-called “free trade” treaties. “Fritz” Hollings (D-SC) made this observation about the insidermanipulation of U. We care about union contracts that guarantee dignity at work and a decent standard of living at home — regardless of race.” The Social Contract Journal. artists. the financial crowd.S. North Carolina appears to have realized few if any substantial benefits from China's admission to the WTO. and some 300 scientists. The North America Free Trade Agreement (NAFTA). WEF is part of the establishment who. The problem is that the government is too big and of one mind with Wall Street. multi-national corporations. and ethnic interests all have a stake in “free trade. along with the restoration of Food Stamps for legal immigrants.S. Gemma. Corporate America and their economists." It isn't just people losing jobs and not being able to find other employment that pays as well as their former jobs. took on in 1994.”5¶ • Lutheran Immigration and Refugee Service: “We *support+ an immigration system that…allows immigrant workers to live freely and openly in our society. some 200 government leaders. Ernest F. 
”The position of the UFCW is simple and direct: we don’t care about green cards. as Lamb says.”4¶ • League of United Latin American Citizens (LULAC): “LULAC supports the regularization of undocumented workers in the United States…to allow immigrants to remain with their families while their applications are processed.”7¶ Why Fight Something ‘Free’?¶ Of course. gender. The World Economic Forum (WEF) is an example of a formidable battalion in the open borders army. Spring 2012. The cabal’s one mind is to make the people feel like jobs are being created while [it] off-shores jobs as fast as it can. Major firms from all sectors of business and industry are represented.S. AS] Corporate elites and political globalists are mounting an assault on American immigration restriction laws. and neutralizing U.S. and the establishment of regulatory agencies such as the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) to facilitate them. Sen.

government trade and employment data conducted by the Economic Policy Institute.2 billion. a non-partisan think tank.S. an estimated 682. as of 2010. while imposing obligations and restrictions on the beleaguered American manufacturing sector. the U. held a $1. NAFTA continues to cost jobs: during the years 2007-2010.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade and exceptions for special interests. the U.S.6 billion trade surplus over Mexico.8 .400 jobs as a result of the trade deficit created by NAFTA. Before the signing of NAFTA. jobs were lost or displaced because of the NAFTA deal and the resulting trade deficit .¶ From 1989 to 2002.S.900 U. Mexico’s trade surplus now hovers around $97.S. according to a study reviewing U. economy has lost 116.

Ron Paul calls this "a sneaky form of international preemptions.¶ The trade pact's 1.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Manufacturing Free trade tanks the manufacturing sector which makes our exports even less competitive causing more job loss. and we couldn't have won World War II without it.com/columnists/phyllisschlafly/2013/01/23/free-tradecheats-americans-n1494749/page/full. Constitution. After World War II. Even the Washington Post now acknowledges that "trade liberalization" with China is a big reason for the decline of U. AS] The official U. 13 [Phyllis. bringing electricity and indoor plumbing to most homes and good wages that built a middle class to enable blue-collar workers to support a fulltime homemaker to raise their children. not just in low-end industries but also make a victim of the electronic equipment manufacturing industry. a disaster for America to lose our manufacturing base specifically because that causes us to lose our "ability to innovate. our manufacturing base caused an incredible rise in our standard of living. Master's in Political Science from Harvard University. which proves that a manufacturing base is essential for national security.4 percent over the previous year."¶ Our annual trade deficit with China has increased to $290 billion. and the United States has lost an average of 50. but finally their dogma is cracking.S. estimates the Korea agreement will cost us 159. 150 tons of steel every hour and eight aircraft carriers a month. America steps . which is a fancy name for free trade. Our exports to China were up 6. manufacturing jobs.5 percent. employment dropped 2. indeed.S.000 more jobs over the next five years. International Trade Commission admits that the Korea agreement will cause significant job losses. but imports increased by 6. Shih emphasize the effect on innovation in their new book "Producing Prosperity: Why America Needs a Manufacturing Renaissance." Another useful book is "Freedom's Forge" by Arthur Herman.¶ Most people recognize that America's prosperity and high standard of living depend on our remarkable power and skill of innovation produced by manufacturing.¶ The main defect with free trade is that.¶ We've been told that the new normal is for America to be an economy based on providing services instead of products.¶ Mainstream economists have been stuck for years in the notion that any attack on "free trade" is heretical.¶ Forbes Magazine published an article titled "America's Manufacturing Crisis: Finally Harvard Gets It. according to a new study by the Federal Reserve's Justin Pierce and Yale's Peter Schott. a leftist think tank."¶ The theorists held onto their out-of-date free-trade theory despite the loss of millions of outsourced jobs. They should read Alexander Hamilton's great 1791 treatise on the importance of manufacturing. The trouble is it's pretty hard to export services such as waiters and dry cleaners. 1/23/13.S.S.”http://townhall.000 U. in the words of the old cliche. Schlafly. we granted Communist China Permanent Normal Trade Relations (PNTR). accessed 7/1/13. despite 42. The Economic Policy Institute.¶ Harvard management professors Gary P. and despite the loss of high blue-collar wages that could support a family.¶ Our manufacturing base was what enabled the "arsenal of democracy" in 1944 to produce a war plane every five minutes. we can only export things we make.6 percent because of a combination of outsourcing and absence of job growth that would have taken place without the trade agreement. it takes two to tango. “Free Trade Cheats Americans. U. But our loss of innovation is finally waking them up." What academics finally "get" is that it is.¶ In 2002.S.000 pages of rules and regulations will be enforced by foreign tribunals.000 manufacturing jobs a month ever since. factories permanently closed. undermining the critical checks and balances and freedoms established by the U. Pisano and Willy C. Town Hall.

cheats us with shoddy and dangerous exports. forces foreign-owned plants to give China their patents and trade secrets.¶ China protects and subsidizes its home industries and products. operates a large network of technology spies in the United States and pays slave-labor wages to its workers.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade naively onto the dance floor. . manipulates its currency to keep it artificially low. but Communist China won't dance.

S. Importing Aliens.700 H-1B and L-1 visa holders on its payroll. columnist with Middle American News. who directly substitute for.¶ The loopholes also provide an unfair competitive advantage to companies specializing in offshore outsourcing. businesses to employ foreign workers in occupations that require technical expertise such as scientists. high-skilled American jobs overseas. too. American workers are being replaced by their cheaper foreign counterparts.276 in 1998 to 37. In reality. notes that Xerox CEO Ursula Burns is the vice chair of President Obama’s Export Council. 12 [Paul B.” *and+ they are training their Indian counterparts.S. Corporations are now changing the ratio between on-site and offshore workers. bringing fewer employees to the U. Indian national Nandita Gurjar. On the other hand.” The Social Contract Journal. but training them to train fellow workers in their native lands. workers — displacing and denying opportunities to American job seekers. AS] An important feature of these free trade agreements is “H-1B” and “L-1” visas — mechanisms which allow U. “and people up here are scoffing and laughing because she made her mark before she became CEO by setting up the offshoring of . Its workforce has increased from 5. rather than complement.400 to 113. 2010 report in The Times of India. undercutting companies that hire American workers. If more multi-nationals adopt this L-1 tactic.17 Offshoring jobs through the H-1B program is so common that it has been dubbed the “outsourcing visa” by India’s former commerce minister. engineers. pg N/A.145 in 2010.¶ The offshore outsourcing industry in India is generating $62 billion a year in revenue. associate professor of public policy at Rochester Institute of Technology. the IT mega multi-national.S. ambiguities in both the H-1B and L-1 programs have made it easy to bring in cheaper foreign workers. nearly all of the employers receiving the most H-1B and L-1 visas are using them to send tens of thousands of high-wage. has risen from 2. up from $4 billion in 2000. For at least the past five years.18 According to a study by Ron Hira. Infosys revenues increased to $4.¶ By way of background. according to a January 1. up from $203 million in 2000. says that U. For example.16¶ Visas issued in the L-1 category involve transfers within the same company. who heads human resources at Infosys.S. The number of L-1 visas issued to India for example. “Free Trade: Exporting Jobs. who are also being asked to train their foreign replacements. The premise of this work visa system is that the corporations still seek and train Americans to ultimately fill the jobs. Spring 2012. and Xerox just took over Affiliated Computer Services *ACS+.8 billion in 2010. H1-B and L-1 foreign workers are allowed into this country on a temporary basis.” Hira. and Infosys has 10.S. Gemma. U. and computer programmers.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Outsourcing Free trade agreements are designed to encourage outsourcing and foreign employment killing job growth.800 in that time period. whose university is located in the same city as Xerox headquarters. Volume 22: Number 3.. and employees do not need to be paid the minimum wage levels of the U. and ACS is offshoring *jobs+ like crazy. contributions to Social Security alone by Indian firms would normally amount to about $1 billion—but those foreigners don’t pay into Social Security for Americans. the American economy takes another hit. “I have friends at Xerox. which are much higher than what an employee on an L-1 would be paid. the number of H-1Bs increased about 30 percent during the same period. companies are hiring more people within India rather than taking people from her country. with ordinary skills.

or involves specialized knowledge. executive. In fact. . the L-1 program does not require that workers be paid local prevailing wages — so they can be paid the prevailing wage of their home country.” According to Hira. a U. “The only thing she knows how to export is jobs!”19¶ Hira warns:¶ Like the H-1B program. or a subsidiary or affiliate thereof.20¶ Hira also emphasizes this point: “Unlike even the H1B program. nor that they have made an effort to actively recruit U. Applying firms do not have to prove that a labor shortage of domestic workers exists.S. the L-1 program does not require a labor market test. or even operate in more than one country — it merely requires that the alien worker comes to the United States to continue to serve the petitioning employer. in a capacity that is managerial.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade engineering in India. Any foreign company can use the L-1 visa to send employees to the United States to open a new office. workers for the job.”¶ The law creating the L-1 visa category does not even require the petitioning company to have any operations in the United States.S. worker can be displaced from a job by an L-1 worker.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Currency Manipulation Currency manipulation within FTAs ensures US workers always lose – Japan proves.

Free Trade

Scott, Ph.D. Economics, University of California at Berkeley, 13
(Robert E., 4/7/13, Economic Policy Institute, “Rising trade deficits with Japan illustrate problem with proposed Trans-Pacific Partnership,” http://www.epi.org/publication/rising-trade-deficitsjapan-illustrate-problem/, accessed 7/2/13, AS) The U.S. trade deficit with Japan has increased steadily over the past four years, reaching $79.9 billion in 2012, an increase of $13.4 billion (20.2 percent). Last month, the United States and Japan agreed on language that could allow Japan to join negotiations to enter the TransPacific Partnership (TPP), a proposed free trade agreement with 10 other Asia-Pacific countries (a new round of negotiations on the TPP began in Singapore this week ). ¶ Exports support U.S. jobs but the larger volume of imports displaces even more jobs. Trade deficits such as the one we have with Japan have cost the United States millions of jobs, most of them high-paying jobs in manufacturing. Signing trade deals is an ineffective way to create jobs, in large part because they usually result in higher trade deficits. One of the biggest causes of our trade deficits is currency manipulation, which acts as an artificial subsidy to other countries’ exports and a tax on U.S. exports. Japan has a history of currency manipulation, and Japanese Prime Minister Shinzo Abe announced that he intended to weaken the yen when he was elected in December. The yen has declined 11.9 percent since then.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Job Quality

Free Trade

Even if they win the difference between jobs created/displaced is zero, job quality still suffers.

Bivens, Ph.D., Economics, New School for Social Research, 8
(Josh, 6/6/8, Economic Policy Institute, “Trade, jobs, and wages,”http://www.epi.org/publication/ib244/, accessed 7/2/13, AS) The Economic Policy Institute and other researchers ¶ have examined the job impacts of trade in recent years by ¶ netting the job opportunities lost to imports against those ¶ gained through exports.1¶ One criticism of these studies ¶ is that they do not try to estimate the jobs gained from ¶ capital inflows. However, this criticism misses the point ¶ of these studies: estimates of jobs displaced by growing ¶ trade deficits are not a declaration of exactly how many ¶ more jobs the economy would have today if these deficits had ¶ not grown. Rather, they are a conservative measure of the ¶ involuntary job displacement caused by these growing ¶ deficits and an indicator of imbalance in the U.S. labor ¶ market and wider economy. These studies also provide an ¶ indicator of how trade has aff ected the composition of jobs ¶ in the U.S. labor market.¶ Economists may cheerfully label it a wash when the ¶ loss of a hundred manufacturing jobs in Ohio or Pennsylvania is off set by the hiring of a hundred construction ¶ workers in Phoenix, but in the real world these displacements often result in large income losses and even permanent damage to workers’ earning power.2¶ Lastly, and importantly, even if trade deficits and ¶ capital inflows were to fight to a draw and there was ¶ no eff ect on the total number of jobs, job quality could ¶ still suffer. Manufacturing jobs (disproportionately lost to ¶ trade) tend to pay more and have better benefi ts, especially for workers without a four-year degree.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker AT: Buy America Proves

Free Trade

Buy American doesn’t prove that free trade is good for jobs – it only mandates products are 25% American.

Collins, former state representative and a former mayor of Norwalk, Connecticut, 10
(William A, Nov. 8, 10, Institute for Policy Studies, “Free Trade: A Corporate Scam,” http://www.ips-dc.org/articles/free_trade_a_corporate_scam, accessed 7/2/13, AS) So why not impose more tariffs to raise prices for specific foreign goods and services? Not only would this save and possibly create jobs, we could use the law to prohibit entry of those products whose manufacturer destroys the environment or abuses workers.¶ Well, there's a lot of money to be made in destroying the environment and abusing workers. That's why multinational corporations invest big bucks in the legislative process to assure they can continue to do just that. Only citizen protests slow them down.¶ Disappointingly, even our own government fails to purchase enough goods at home. The long-established Buy America Act requires only that a product bought with federal tax money be 50 percent American. Additional loopholes take that down to about 25 percent in practice. Further, in 2008, there were 65,000 waivers granted to avoid the law altogether.¶ There's more, way more. Corporations, lobbyists, importers, politicians, news media, and many economists are in on the deal. They kowtow to employers, investors, and advertisers who make a bundle off the "race to the bottom" for wages.¶ If by chance you would like to do your bit for the economy, you can urge your members of Congress to oppose the upcoming free-trade agreements with Colombia and South Korea. They would only make unemployment worse.¶ And, don't pay attention to economists on trade issues. Too many have sold out. They warn of trade wars, but ignore the collateral damage of the trade peace we're suffering today.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Bad-Poverty .

A study has low internal validity when there is little reason to believe its estimates reflect the causal relationships between the thing being evaluated (e. They may not benefit much at all. depend on the terms of trade (see Appendix B).edu/cgi/viewcontent. 1/13/2011. If.cmu. and homogenous labor markets within each country. full employment. assistant professor at Carnegie Mellon. however. Furthermore.cgi?article=1352&context=philosophy. the Bank does not test any other hypotheses that could explain the correlation they report between changing population weighted trade to GDP ratios and real GDP per capita in developing countries. this is not enough to show that free trade increases growth.cmu. and Inequality”. “Free Trade. Poverty. the study has what economists refer to as low internal validity. KR) According to the Argument from Comparative Advantage. it assumes that labor cannot move between countries but that it costs nothing for laborers to switch industries. 8 (Nicole. CMU Research. “the combination of rapid growth with no systematic change in inequality has dramatically reduced absolute poverty in the globalizing countries”. growth) even holding the study’s circumstances fixed. Worse. The first problem with this argument is that it does little to show that countries that trade freely grow more than those that do not. How much poor countries will benefit from free trade will.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Indicts Free trade doesn’t increase growth-jump from correlation to causation Hassoun. if countries are allowed to trade freely. the argument does not tell us . accessed 7/1/13. may increase both trade to GDP ratios and real GDP per capita. The Bank only establishes a correlation between population weighted trade to GDP ratios and real GDP per capita in developing countries but. The argument also assumes that goods produced in each country are identical and that consumers and firms strive to maximize utility and profit respectively. http://repository. we do not assume that there will be full employment after trade.edu/cgi/viewcontent. accessed 6/30/13. The Bank’s study does little to show that the jump from correlation to causation is justified. 10/1/2008.g. consider the Bank’s argument for the conclusion that free trade is reducing poverty because it has increased growth rates without increasing inequality in recent decades.g. CMU Research showcase. 41 The argument assumes that there are zero transaction costs. So. for instance. or foreign investment. markets will reach a Pareto optimal state.” http://repository. geographical factors. and the Environment. assistant professor at Carnegie Mellon. as they put it. They will reach a state such that no one can be made better off without making someone else worse off. Free trade won’t help the poor-flawed assumptions Hassoun. “Free Trade. Consider the Bank’s evidence for a link between free trade and growth. even setting aside the distinction between liberalization and free trade. Or. Poverty. Without these assumptions we can see that free trade may even hurt the poor. We know that many of these assumptions are false in the real world. It is quite possible that there is a common cause of an increase in population weighted trade to GDP ratios and real GDP per capita in developing countries. KR) Next. free trade) and the particular outcome observed (e. 11 (Nicole.cgi?article=1354&context=philosophy. Foreign aid. More generally. many of the assumptions required by the Argument from Comparative Advantage are important and unrealistic. for instance.

At least on this interpretation of the Paretian criterion. thus. The benefits could go to the rich and the costs to the poor. Since China and India account for about a third of the world’s population. This method weights “each commodity in proportion to its share in international consumption expenditure. this “basket” does not represent the “basket” of goods and services the poor purchase. Poor people may not benefit from any resulting growth at all. like ‘Caesar’s spirit. 1/13/2011. 42 At best.’” 43 Reject their evidence-it relies on flawed scholarship and overestimates the decline in poverty Hassoun. The Bank relies on PPP measures to convert country estimates of income poverty into a common currency.72% of the world’s population in 2004). the above estimates of world poverty are quite uncertain. CMU Research showcase.36% of the world’s population in 1981 to 17. We need not arbitrate between these different ways of measuring poverty here. http://repository.27% of the world’s population in 2004). Kaldor-Hicks Pareto optimality will be achieved with free trade in the real world. assistant professor at Carnegie Mellon. a change from one state of affairs to another is optimal if the benefits of the change exceed the costs of the change. . Only 63 countries participated in the 1985 ICP. The Geary-Khamis method essentially averages the international price differentials across all commodities.cgi?article=1354&context=philosophy. The case for free trade. Poverty. This is problematic. They may even suffer. lose their jobs as production shifts to commodities made by people who are not poor.” essentially estimating purchasing power over an international “basket” of goods and services. Services and “nontradables” are relatively cheaper in countries.13% of the world’s population in 1981 to 47.cmu. “Pareto Optimality can. depends on how closely actual markets approximate or can be made to approximate ideal markets. and Inequality”. China did not participate at all in the ICP surveys until 2005 and India did not participate between 1985 and 2005. consider how PPP is calculated on the most common (Geary. the number of people in poverty fell by more than 22% (from 40. To see the effect of this change.’ ‘come hot from hell. using these measures to estimate poverty rates makes it seem like there are fewer poor people in the world than there are. To see how the problem arises. KR) Today the World Bank poverty database tells us that. Another problem is that the most common PPP measures make it seem like the poor are doing better than they actually are. on the US$1 a day poverty line. These measures are based on surveys with inadequate coverage. According to the World Bank’s US$2 a day poverty line.Khamis) method. for instance. the database reports that the number of people in poverty fell by about 20% (from 67. The main sources of PPP measures are the Penn World Tables (PWT) and the International Comparison Project (I CP). “Free Trade. Poor people may. consider the 1993 poverty rates using the new and old methodologies: Table 1. 11 (Nicole.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade much about the distribution of benefits to individuals that will result from free trade. So. It contains services and other non-tradables that the poor do not buy – the poor primarily purchase food. On the Kaldor-Hicks criterion. Poverty estimates in 1993 as determined by new and old World Bank methodology. accessed 7/1/13. Unfortunately. Unfortunately.edu/cgi/viewcontent. Both methods of measuring poverty share some common problems. the Bank’s new method of calculating poverty lines cannot support such comparisons. The World Bank’s method of measuring poverty changed in the late 1990’s. This implicitly inflates the assessed purchasing power of the poor in developing country currencies.

So. Again. Biased PPP measures make inequality appear to be lower than it actually is. for instance. Furthermore. These studies find that free trade alone does not promote growth. it is probably the case that it weights international inequality by population using a biased PPP index. But the critics suggest that it primarily captures a correlation between growth and black market exchange rates rather than a correlation between growth and free trade. CMU Research showcase. it is a poor proxy). Even if inequality neutral growth generally reduces poverty. 11 (Nicole. They create an index to measure the effect of free trade on growth. however.cgi?article=1354&context=philosophy. “Free Trade. have not been able to replicate this finding and argue that Dollar and Kraay do not take possible endogeneities in their data properly into account.. and Inequality”. If. The report does not explain how it measures global inequality. the report’s estimate of inequality is probably inaccurate. accessed 7/1/13. Finally. Perhaps their argument is better? Unfortunately. even if we granted for the sake of argument that free trade increases growth rates without increasing inequality that would not show that free trade decreases poverty . The World Bank does not provide convincing evidence that the poor are benefiting from free trade. provide a different argument for the conclusion that the effect of free trade on the poorest countries has been good. growth rates amongst the poorest segments of the population may influence policies that influence overall growth rates. http://repository. the Bank does little to show that free trade has not increased inequality. Others. growth can be inequality neutral if it only increases the income of the middle class. the Bank ignores alternative explanations. Of course. the World Bank’s has not done enough to show that free trade is causing poverty to fall. And. many use this as a proxy for world inequality (though. even if the Bank is interested in the impact of the reforms it encourages that promote free trade on countries on average.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free trade increases income inequality-their evidence rests on false assumptions-better studies prove trade only benefits the rich Hassoun. assistant professor at Carnegie Mellon. there are an equal number of rich and poor people. they rely on a study by David Dollar and Aart Kraay that purports to show that “there is a one-toone relationship between the growth rate of income of the poor and the growth rate of average income in society”. others also argue that free trade reduces poverty and inequality. Rather. Several recent studies have decomposed some of the different indices of free trade including the Sachs-Warner index.cmu. however. Sachs and Warner assert that most countries that have started trading freely. however. After all. Jeffery Sachs and Andrew Warner. The developing countries could be growing because the rich in those countries are gaining more than the poor are losing.edu/cgi/viewcontent. In short. Even worse. Some causes of inequality. Sachs and Warner’s study does not allow us to conclude that free trade is reducing poverty or inequality. Since it arrives at this result. Poverty. has been halted and even reversed”. as we argued above. At least on the Gini index. for instance. 1/13/2011. KR) Even if we granted without evidence that free trade increases growth rates.Warner index includes measures of tariff and non-tariff barriers to trade and distortion in the foreign exchange market. the inequality. have grown while most countries that remain closed to trade have stagnated. the increasing inequality between the middle class and the poor may be offset by the decrease in inequality between the middle class and the rich. others do not. The Bank merely claims that “the long trend of rising global inequality . including open developing countries.. as we have seen. it should not look at international inequality weighted by population. others using some of the same measures of free . The Sachs.neutral growth reduce poverty.neutral growth that free trade brings may not reduce poverty. this study’s measure of free trade is questionable.

. Similarly.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade trade as the World Bank and Sachs and Warner. though openness is strongly and positively correlated with growth amongst the wealthiest 40 percent of households. the evidence suggests that free trade is correlated with more inequality in developing countries. Lundberg and Squire report that growth amongst the poorest 40 percent of households is negatively correlated with greater openness (on the Sachs -Warner index). If these studies are correct.000 per capita income (PPP). but improving upon these studies. have found that free trade is correlated with increasing inequality in the poorest countries. The IFI’s faith in the ability of free trade to reduce poverty while decreasing or at least not increasing inequality is unsubstantiated. those countries with a high ratio of exports and imports to GDP had more inequality. A recent study by Milanovic found that among countries with less than US$5.

1/13/2011. and they still have relatively low trade ratios Hassoun. Growth and Poverty claims that free trade reduces poverty and inequality by increasing growth. This is worrisome because the kinds of policies pursued by countries like China in achieving growth were a-liberal. First. China and India began to open up their markets only after their growth rates increased. on average.edu/cgi/viewcontent. In fact. accessed 7/1/13. however. Weighting countries by population. weighted by population. measuring changes in trade to GDP ratio captures changes in openness. the Bank then notes that these “more globalized” developing countries have grown more than “less globalized” developing countries.cgi?article=1354&context=philosophy. Globalization. 11 (Nicole. assistant professor at Carnegie Mellon. Including countries like China and India. CMU Research showcase. KR) Globalization. Countries with a high trade to GDP ratio are not necessarily more open to trade. however. and Inequality”. in the group of globalized countries virtually “guarantees that the globalizers.cmu. that there are a few reasons to worry about the Bank’s report. “Free Trade. the Bank overlooks the distinction between free trade and opening up markets to trade (or trade liberalization). This section will argue. .” It is not clear why the IFIs would consider trade to GDP ratios a good measure of free trade. show better performance than the nonglobalizers. Growth and Poverty separates the top third of the developing countries with the greatest change in the ratio between trade and GDP from the rest. Some of the globalized countries have smaller trade to GDP ratios than the non-globalized countries.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Empirics Arguments about China and India are backwards-trade only increased after growth and poverty reduction. many countries with high trade/GDP ratios have had abysmal economic performance. Poverty. Rather. “many of the globalizing countries initially had very low trade/GDP ratios in 1977 and still had relatively low trade/GDP at the end of the period in 1997 (reflecting more than just the fact that larger economies tend to have lower ratios of trade/GDP). The World Bank may have the causality backwards. They are probably just confusing free trade with liberalization although some have accused the Bank of trying to confuse others. http://repository. Those countries which were already liberalized before 1977 and have the fewest barriers to trade are grouped with the countries that remain relatively closed to trade.” The results would be very different if the countries had been grouped differently. which have low trade/GDP ratios.

or the 400 migrant workers deported from Namibia after having been in the country for only one month. KR) Understanding the race to the bottom requires that governments. After the factory closed in 2000. 2003] in their efforts to attract trade and investment. developing countries adopt neo-liberal policies to attract FDI and therefore trade off citizen’s rights to investors or capitalists to be able to get the highest profit by paying the minimum for all costs.no/Documents/Kirkens%20N%C3%B8dhjelp/Publikasjoner/Temah efter/Race%20to%20the%20bottom. The AFL-CIO and many organisations in the US issued a statement on the Principles of Unity on Trade & Investment. taxes. or the murdered Cambodian garment union leader. how real was it all?” Monitoring these trans-national corporations’ (TNCs) bottom end production in countries such as Thailand. Director of Thai Labour Campaign. http://www. watched their farms foreclosed and suffered other indignities from corporate globalisation.kirkensnodhjelp. Bangladesh for simply seeking advice from a trade union on how to get paid on time. claiming that “Millions of people across this country and around the world have lost jobs. without paying compensation to the over 1000 workers. one can see the difference. labour wages and welfare while carrying out practises harmful to the environment. But. kicked out of the factory for voicing concern at the alleged mismanagement of the employees’ provident fund? Why did the image of a young woman union leader in the Dominican Republic who has had her arm broken by company-hired thugs keep coming to mind. after tensions over horrific living and working conditions erupted into riots. trade unions and labour advocates of the global South face the reality that they are competing amongst themselves just as much as. Norweigan Church Paper Series. accessed 7/1/13. Various reports refer to the race to the bottom. January 2005. since taxation revenues would decline. And what about the trade union president at Bata Ceylon Ltd. In this process of the race to the bottom.” says Pu. quality and profitability gains to be made from being good employers. business building is a key issue. “I used to work in Bangkok [in a unionised factory] earning 250 Baht a day. “The Race to the Bottom: Exploitation of Workers in the Global Garment Industry”.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Race To the Bottom Trade causes poverty and exploitation-multinationals use workers as robots and prevent wealth redistribution Yimprasert.” Susan George’s statement emphasises the serious nature of the situation: “Globalisation inevitably transfers wealth from the poor to the rich and increases inequalities . issued a strong statement to the business community at the World Economic Forum: “As the corporate bosses proclaimed their commitment to workers and communities. Chea Vichea?” At the World Economic Forum in Davos. This would cause the state to lose its redistribution role and its capacity to offer services to citizens. and managing directors were falling over themselves to highlight the productivity. “I received only the minimum wage with no welfare and there is no union”.pdf. company presidents. been poisoned. it was hard to forget the 32 workers recently fired at Square Fashion Ltd. The ITGLWF went on to state: “In Davos.” The International Textile Garment Leather Workers Federation (ITGLWF). or to a greater extent than they are competing with the North [Chan and Ross. for example “economic competition encourages deregulation. the largest global union of textile and garment workers.. Pu is now earning 40% less than at her former job in the Bangkok factory. she returned to her home in Kabinburi to work in a factory promoted by the Board of Investment (BOI) producing garments for export. CEOs. and corporations claim that they operate Corporate Social Responsibly (CSR). 5 (Junya.

with around one third of sales in Western Europe. organise. 1. particularly in Asia. that the industry’s investors can exploit vulnerable people and their needs without giving workers worldwide full legal rights and respect. no safety nets. especially in the garment and textiles industries. A RACE TO SWEATSHOPS “A sweatshop is a workplace that violates the law and where workers are subject to: extreme exploitation. told the Thai workers that workers in China stand to stitch without complaining. Cambodia for instance earns 97 per cent of its export revenues from the textile and clothing industry. These are countries that build exportbased economies on the back of low wages and appalling working conditions in keeping with the liberalisation agenda. no social security. meaning that it is an industry that cannot replace workers with robots. globalisation shifts sovereignty from more or less democratic States to non-elected. arbitrary discipline. and are going to face under the WTO trade rules: “From the 130 textile and clothing producing countries in the developing world today. “The problem now is that the management sees that we cannot reach the target if we stitch sitting down. Profits are not reinvested neither in the industries nor the countries concerned. poor working conditions. And among the world’s low-income economies. one third in North America.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade both within and between nations. “Millions of mostly Italian and Jewish immigrants provided cheap labour for garment ‘sweatshops’ in major cities where workers toiled for long hours under inhuman conditions for merger wages.1 PRECARIOUS EMPLOYMENT The Clothing industry is big business: the world’s consumer s spent around US$ 1 trillion buying clothes in 2000. But what is left for the workers? Little. Of the total world textile and clothing exports.” (Sweatshop Watch) Struggles against sweatshop conditions have been seen throughout industrial history. expressing the seriousness of the problem that workers in this industry face. issued a strong statement at both the World Trade Organization and the World Economic Forum. such as verbal or physical abuse. The International Textile. However.transparent. They ended up working in exploitative and brutal sweatshop conditions and thus began to organise themselves to fight against these abusive working conditions. This causes a lot of muscle pain. and Leather Workers Fe deration (ITGLWF). Garment. non-accountable entities which consider democracy irrelevant and an obstacle to economic efficiency. Globalisation generates far more losers than winners. ” This worker said that the management. companies often treat workers as if they were robots. non. We have to stand to stitch. 42 per cent comes from Asia. This does not mean. going to end up? However. . Through such precarious employment this “longer. Where are these young workers.” 1. what is happening should come as no surprise. the largest global union of textile and garment workers. faster and cheaper” industry can make workers to become more like robots. In most of these there is no alternative employment. so they have set up a new system by which we feed cloth faster standing up. especially since the beginning of the nineteenth century when immigrants from Europe fled to the United States in the hope of a better life. Those industries likely to be eliminated are some of the poorest countries in the world. including the absence of a living wage or long working hours. and one quarter in Asia. mainly women.” The textile and clothing industry is in fact an important industry for most developing countries. or fear and intimidation when they speak out. The clothing industry is labour intensive. over 20 countries rely on earnings from the textile and clothing industry. such as health and safety hazards. which has a factory in China. however. or attempt to form a union. it is expected that only about twenty will be able to maintain a viable textile and clothing sector.

Poor women are becoming increasingly marginalized as the “feminization of poverty” manifests itself in many parts of the world.unhabitat. The State of the World’s Cities.peopleandplanet.such as clothing. according to the report. millions of people work for long hours and low pay to make some of the world's most expensive consumer products . financial services (such as banks.¶ Traded services¶ Services make up approximately 25 per cent of total world exports. The privatisation of water supply has already had detrimental effects on people in a number of developing countries. KR) According to UN-HABITAT’s new publication. they compete fiercely with each other in what has been called "a race to the bottom".” http://ww2. The use of child labour in manufacturing units in developing countries to help make goods for export was highlighted in the early 1990s by disclosures about young children being employed in rugmaking factories in India. For developing countries. shoes. November 4. In so called "free trade zones". and public utilities like water.Hardest hit by globalization are women and children-the most vulnerable of urban dwellers. “Trading off the Poor”. sanitation and education).pdf.” For the urban poor who are impacted by this race. and the prediction that. Pakistan and Nepal. urban areas in the world’s least developed regions will absorb nearly all of the global population increase predicted for the next three decades. Environmental standards in free trade zones are often low and even non-existent. accessed 7/3/13. lower infant mortality and wider access to infrastructure and social services. telecommunications. including tourism. author of '100 Ways to Make Poverty History'. 2004. including greater longevity. rising incomes and improvements in the quality of lifeare rapidly being offset by the negative aspects of rapid urbanization: increased poverty. KR) Under globalisation. Trade increases poverty-race to the bottom and service trade Madeley.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Trade increases poverty-it causes a race to the bottom UN-HABITAT 4(United Nations HABITAT program.org/mediacentre/documents/sowc/Featurerace. where streets riots erupted following . People and Planet. public services (such as health care. 10 (John. earnings from trade in services accounts for about 20 per cent of their overall export earnings. for example in Bolivia. increased literacy. labour money remitted by nationals working abroad). electricity and gas. 2010. 2004. the makers of manufactured goods locate their factories in countries where wages are low. there are no winners. by 2020. The positive aspects of globalization.¶ The widespread privatisation of services could have considerable repercussions for the poor. a “race to the bottom. They break down into different categories. shipping. mask the unfortunate truth that these benefits are not being shared equally. This “urbanization of poverty” is being propelled by a tremendous increase in the transnational movement of people and capital. will be living in slums by 2030. The rapid transfer of money and jobs to cities and countries where cheap labour can be found has fueled what is being termed by the Report. Sept. the “fruits of globalization” –economic growth. and the losers will most likely find themselves among the projected two billion people who.net/?lid=27149&section=48&topic=44. toys. “Cities and Globalization: A Race to the Bottom? UN-HABITAT Report finds the “fruits of globalization” are not offered to the poor. insurance companies). greater inequality. http://www. and electronic equipment. 14. The effects of globalization on cities –both positive and negative –need to be better understood if public policy is to be effective in bettering the lives of those who live in them. The WTO lists 160 international traded services.¶ Affiliates of trans-national corporations (TNCs) account for over half the total output of manufactured goods.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade the imposition of charges which hit hardest at the poor.¶ Western countries now want to extend the WTO's General Agreement on Trade in Services (GATS) which governs the trade. The end of barriers to trade in services could be a major flash point between rich and poor countries. . TNCs are pressing for such liberalisation.

. author of '100 Ways to Make Poverty History'. (see Facts and Figures section). 2010. 10 (John. it has done little to help most of sub-Saharan Africa.peopleandplanet.peopleandplanet. much hypocrisy in the rich world's calls for free trade. accessed 7/3/13. where most of the poor make a living. author of '100 Ways to Make Poverty History'. “Trading off the Poor”.net/?lid=27149&section=48&topic=44. This has led to the concentration of small farms into larger ones and has not helped sustainable agricultural development. KR) The argument against unregulated free trade." concludes a UN Conference on Trade and Development Report report. People and Planet. is that while it has raised the living standards of most people. November 4. Trade liberalisation and the rules of international trade are having a detrimental impact on many of the world's poor and the environment.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Structural Displacement Trade increases poverty-destroys small-scale farming Madeley. the United States and the European Union have not done the same. At the same time. While trade has helped countries such as China. South Korea and others in east Asia to reduce malnutrition and poverty. 2010. http://www. Few of the poorest countries have the industrial muscle or service sectors to compete with the flood of imports from the west. November 4. http://www. “Trading off the Poor”. while these same countries are being urged by the IMF and the World Bank to open their markets without delay. driven solely by market forces. indeed.¶ There is now less confidence that the mainstream trading system can help the poor. in the 1980s and 1990s. While developing countries have allowed in more food imports.¶ International trade has encouraged specialisation of labour and products which has kept many countries as "hewers of wood and drawers of water" . "For more substantial gains (towards food security) countries will have to encourage the expansion of their domestic food production sectors.¶ Western farmers receive huge handouts in subsidies and are increasing their share of global markets at the expense of the world's rural poor. food imports resulting from trade liberalisation are at least partly responsible for the destruction of small farmer livelihoods. poverty has not fallen in many countries.as producers of primary products. After 20 years of intense trade liberalisation. the west is moving very slowly to lower its quotas on imported clothing and textiles from poor countries.¶ There is. which has hindered them from developing more balanced economies. accessed 7/3/13. KR) Yet at the start of the 21st century trade does not seem to be helping some of the world's poorest communities to escape from poverty. 10 (John. In agriculture. "The benefits of liberalisation to low-income agricultural producers are likely to be very limited. it has not done so for the poorest. People and Planet." says a US Department of Agriculture report.net/?lid=27149&section=48&topic=44. Trade doesn’t solve poverty-countries can’t develop balanced economies Madeley.

especially. Biofuel programmes could result "in a concentration of ownership that could drive the world's poorest farmers off their land and into deeper poverty" says a UN report.sugar and palm oil are among those considered suitable .¶ Also of concern are the social and environmental consequences of small farmers being driven off their land. The four major agrochemical corporations . They could also be planted on forest areas and contribute to a degraded environment. "Biodiesel and ethanol may make up 7 per cent of world demand for liquid fuels in 2030. . Monsanto and Syngenta .¶ The patenting of food crops species by transnational corporations (TNCs) is of concern to small-scale farmers who fear that such corporations will have monopoly control over seeds which are crucial to them.net/?lid=27149&section=48&topic=44. including a worsening of global warming. mostly to power vehicles in Western countries. reported the FAO in November 2007. In Latin America. displaced farmers have left the countryside to swell the shanty towns and favellas (slums) of growing cities. Over a thousand patents have been taken out on the five crops that account for 70 per cent of the world's food supply in rice.could be grown on land which at present grows food for people.peopleandplanet.¶ A further threat to the poor lies in the expansion in developing countries of crops being grown for fuel.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Trade increases poverty and hastens environmental collapse-Transnationals control patents and drive small farmers off their land Madeley. with consumption rising fourfold to 36 million metric tonnes a year from today's level of about 8 million tonnes'. KR) A further reason why governments of developing countries now trade foodstuffs is that people abroad can afford to buy them.¶ Crops for fuel . “Trading off the Poor”. 2010. putting an additional strain on resources such as water.Du Pont. 10 (John. maize. http://www. Mitsui. People and Planet. November 4. wheat. Lack of purchasing power in developing countries is a major reason for the continuation of poverty. accessed 7/3/13. soybean and sorghum. unlike many in their own country. author of '100 Ways to Make Poverty History'.own most of the patents.

it is not a fight against poverty one needs but development. such as the World Bank.5 billion people living in extreme poverty across the globe. These citizens are living on less than $ 1. In total. this is almost half of the human race. For nearly a quarter of a century. the lean state and the free trade ideology. PhD researcher in development studies. Third. KR) According to World Bank data.publicserviceeurope. in countries with poverty rates beyond 50 per cent. in the World Bank's neoliberal philosophy. However. there are almost 1. They taught us that poor people never are the first objective of poverty reduction policies. At the same time. Such focus and effort are reassuring because poverty ought not to exist in our extremely rich world. they have allowed for a continuation of the agendas that cause poverty in the first place. health care and skills for this market. Second. while expanding the deregulation that keeps workers poor Mestrum. July 12. 12 (Francine. Their first aim is indeed one of legitimacy of political power and of hiding these real objectives. It is not a societal problem linked to the distribution of wealth and resources but only a lack of market access. 2012. one has to refer to the work of major historians and sociologists such as Geremek.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Deregulation Even if trade leads to anti-poverty programs.beyond poverty reduction . In fact. the privatisations and deregulations were going to continue. they are for the 'vested interests' of workers and not for the 'common interest' of the poor. Clearly. the World Bank also made clear that social protection policies . they lack a clear reference to the necessary economic and social development as well as to economic and social rights. Finally. one wonders why poverty was absent from the political agenda before 1990? And why we are still waiting to see any success for the strategies adopted in the fight against poverty? The answers to these questions are clear when one starts to analyse the discourses and practices of the international organisations that imposed these priorities. . it was clear from 1990 and the World Bank's first major poverty report that nothing was going to change in the 'Washington consensus' policies. According to the bank. And the fight against poverty has become the official priority of development cooperation.com/article/2213/global-poverty-is-a-consequence-of-freetrade-ideology. http://www. First of all. Sassier and Simmel. poverty has been the number one priority on the international community's political agenda. social protection is the best tool we have for preventing poverty and tackling inequality. In other words. It means that poverty reduction policies are 'end-of-the-pipe' solutions that do not stop the impoverishment processes. poverty is a problem of individuals which lack opportunities. “Global poverty is a consequence of free-trade ideology”. and another billion people live on less than $ 2 per day. As for the United Nations and its programme of Millennium Development Goals. And the consequence of this is more poverty.were not desirable for developing countries. Public Service Europe. 'Poverty policies' aim to give neoliberal globalisation a human face. it only papers over the problem.25 per day.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Free Trade Bad .Environment .

which may be less environmentally threatening. free trade discourages sustainable agriculture by hurting small family farms and encouraging large-scale. 1. professor at NYU. However. 1).. professor at NYU. and environmental protection. 243). Winter. Finally. NAFTA. unlawful toxic waste dumping. Canadian Environmental Law Association n. 1. p. In their study of economic development. which in turn affects pollution levels.S. Volume 72. As a result. 50–1). . putting farm workers at higher risk of pesticide poisoning (Greenpeace 1992. While there is some increased efficiency through increased production and economies of scale. p. and safety threats (Sifry 1999). intensive agricultural production. While there are frequent calls for ‘‘goodwill’’ and ‘‘imaginative institutional innovation’’ (Bhagwati 1998. 64. there are no assurances that environmental concerns will be dealt with later. combined with legal reforms in Mexico. 136+ Free trade also has negative effects on sustainable agricultural production. and studies indicate that reduced environmental protection costs have been a factor in industry relocation (U. Sociological Inquiry. Simon 1997). Democracy. Trade-related shifts in agricultural production also increase the use of pesticides and chemicals. Bergesen and Parisi indicate that the process of development still creates increased environmental pressures. “The Effects of Free Trade on Development. p. Trade has led to many environmental abuses by multinational corporations operating in developed nations. and dangerous workplaces were some of the offenses found along the U.d. which suggests a further problem in the hypothesized relationship between free trade. 51). General Accounting Office 1992). has resulted in a farm crisis in Mexico (Barry 1995).–Mexico border (McGaughey 1992. Bergesen and Parisi. p. which can create environmental..S. Rosset 1999. as well as a shift to a postindustrial service sector. Trade also increases the use of biotechnology and genetically modified food. such arguments consistently assert the importance of trade while downplaying environmental concerns. ultimately. controlling for GDP per capita. Sociological Inquiry.d. Extensive pollution. Margaronis 1999).10 Trade is an important influence on economic development. while trade advocates admit that some trade-related environmental problems exist. p. there are limits to efficiency gains and. Research suggests that pollution abatement costs affect trade patterns (Robinson 1988). democracy.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Resource Extraction Free trade leads to environmental destruction—agriculture pressures and pesticide poisoning Grossman. and Environmental Protection”. They agree that there may be improvements in efficiency. p. they continually treat environmental protection as something that can be put off to be dealt with at a later date. Bergesen and Laura Parisi (1999) find rising toxic emissions which then moderate. development increases the volume of production (Bergesen and Parisi 1999. health. Albert J. While trade advocates emphasize the leveling off of emissions. Intensification of agricultural production by large-scale agribusiness threatens small-scale family farmers. it also increases Third World dependency on developed nations (Canadian Environmental Law Association n. but without environmental regulation incentives for green practices they will be quite limited (Marchak 1998).9 Increased trade has raised health threats as there are difficulties inspecting the increased imports (Wiener 1992). p. Furthermore. Number 1. 02 *Peter. find more toxic emissions with democracy (p. There may be some situations in which trade and environmental protection emerge together.

a big unknown is whether it will result in income-induced policy changes before the cost of cleaning up the environment becomes prohibitively high. “Free Trade: Benefit or Peril for the Environment?”. and then starts improving when per-capita income exceeds $5000 per year. received $44 billion in direct foreign investment in 2001. where countries with widely different income levels will have to come together with a unified policy response. 04 *Kumar. China. may be unprepared for the environmental consequences of global trade. A more direct instance of the �pollution haven� effect is the routine transfer of e-waste -. accessed 6-31-13 BLE] Pollution from transportation and consumption of goods. Equally troublesome is the issue of trans-boundary pollution such as greenhouse-gas emissions. Assuming that free trade can eventually deliver this income growth.htm. air and water in the process.used computers and other electronic appliances that contain highly toxic chemicals -. to countries like India. China and the Philippines. A great deal of uncertainty remains about the longterm environmental impacts of globalization. Power generation and transportation -. where the bulk of the world�s population lives. By 2030. . an indirect consequence of concentrating an increasing part of the world�s manufacturing in China will be heavy resource use and pollution locally.will account for three-quarters of this increase. while polluting the soil. But the evidence we have so far suggests that free trade unconstrained by environmental protection could be a recipe for disaster. the final outcome could easily reverse the optimistic result that trade benefits the environment. Studies of air quality show that it deteriorates in the early stages of economic growth. The argument that polluting industries will stay in capital-rich developed countries also loses steam when capital itself is highly mobile. a period in which many domestic economies were turned inside out by globalization. These recent examples heighten the concern that developing countries.commondreams. Between 1973 and 2001. If this holds for most kinds of pollution and resource depletion. January 8. for example.org/views04/0108-10. are all potentially major avenues through which global trade can damage the environment. then incomes will have to increase by a factor of five to ten in large developing countries like China and India before there is sufficient local demand for environmental protection. as well as resource use throughout the life cycles of products.S.two sectors crucial to trade -. When all these effects are combined with production-driven pollution. http://www. writer for CommonDreams news center.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Growth Solves Effects of free trade pollution cannot be recovered by economic growth — becomes net worse for the environment Venkat.from the U. these emissions are projected to be 60 percent higher than in 2001 if no new policies are adopted. 2004. annual carbon-dioxide emissions from worldwide fuel combustion increased by 50 percent. Low-paid workers in these countries work under hazardous conditions to salvage valuable materials from this fast-growing waste stream. Even if companies are investing in China to take advantage of its cheap labor.

and host countries ignore costly environmental standards. substandard working conditions and even forced labor and abusive child labor. 14 (BusinessDesk) . John Carnegie. whereas climate change required global cooperation. says Green Party climate change spokesman Kennedy Graham. Yet the WTO points to its ruling in the 1990s allowing a U.nz/stories/BU1212/S00577/trade-negotiationmindset-hurts-climate-change-talks-greens. sought to maximise national self-interest and were not bound by any deadlines. Environmental Damage According to critics. the increase of corporate farms in developing countries increases pesticide and energy use. “Trade negotiation mindset hurts climate change talks: Greens”. . Yet the WTO states it does not consider a manufacturer’s treatment of workers reason for countries to bar importation of that manufacturer's products." Also addressing the seminar was Business New Zealand's representative at Doha. is a key target of protests aimed at the WTO. accessed 6-30-13 BLE] As underdeveloped countries attempt to cut costs to gain a price advantage.scoop.htm.” as critics call this drive to cut costs at the expense of human rights. December 14. writer for BusinessDesk. replacing native crops with coffee and cocoa trees reduces erosion. Speaking at a Victoria University-hosted briefing on the outcomes of the latest round of global climate change talks in Doha. for instance. accessed 7-6-13 BLE] Dec. "We are using a trade mentality. The WTO is criticized for not allowing barriers to imports based on inadequate environmental standards in countries where goods are produced. 13 [Tom. Trade negotiations over environmental protection fail—need to be separated from economic matters Smellie.com/negative-effectstrade-5221. 2013. In some countries.Global efforts to get a new deal to combat climate change are foundering because they are based on the competitive mindset of trade negotiations rather than collaborative problem-solving.chron." Trade talks were competitive. borders. The WTO notes developing countries insist any attempt to include working conditions in trade agreements is meant to end their cost advantage in the world market. ban on shrimp imports because the fishing methods threatened endangered sea turtles outside U. http://smallbusiness. which are failing to unlock the new business opportunities that would come with a push to decarbonise global economic activity. 2012. who warned the global business community is steadily losing interest in the United Nations-led talks. was about protecting the planet to remain habitable. Graham said trade and climate change required "qualitatively different kinds of negotiations. This “race to the bottom.co.html. “Negative Effects of Free Trade”. 12 [Pattrick. and had a finite timeline if "cataclysmic" climate change is to be avoided.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Rules Check Free trade hurts the environment—no WTO barriers Chmielewski. many workers in these countries face low pay. http://www.S.S. however. The Global Development and Environmental Institute. not just New Zealand but especially New Zealand. finds the environmental impact mixed. journalist for the Houston Chronicle. The extent to which environmental standards should be considered in free trade is an ongoing debate within the WTO. and we are screwing up at a fundamental level.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade .

and U. voicing their opposition to CAFTA.org/resources/wto/environment.S. “Free Trade and the Environment”. and contamination of their communities. Friends of the Earth. PIRG have sounded out a warning about CAFTA’s negative potential impact on our shared environment.S.S. and the extinction of plant and animal species. http://www. And in Central America. National Environmental Trust. who suffer environmental heath problems. Trade Representative and members of the U. Increased trade – and hence dependence on oil – will also contribute to global insecurity by providing further incentive for the drive towards war as the U. Our consumption of oil also leads to violations of the human rights of peoples in oil-producing countries such as Ecuador. Defenders of Wildlife. Indonesia. Congress.globalexchange. displacement. government struggles for control over this most strategic global resource. 11 *Deborah. accessed 6-31-13 BLE] Increasing trade increases our consumption of and dependency on oil.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Fossil Fuels Trade increases oil dependency—causes climate change James. writer for Global Exchange.S. .S. Congress to reject CAFTA. Earthjustice. which has created a massive global crisis of human-induced climate change. Natural Resources Defense Council. and Nigeria. Environmentalists Oppose CAFTA Most environmental organizations in the United States have written letters to the U. National Wildlife Federation. The rise of global temperatures means more severe droughts and floods that will literally change the face of the Earth. 2011. League of Conservation Voters. Colombia. over 800 social organizations – including many environmental groups – signed a petition in July of 2004 urging the U. an increase in heat waves and other human health hazards. the Sierra Club. the loss of coastal lands and the destruction of forests. Groups as diverse as Center for International Environmental Law.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade FTAA Good .

because exporting firms generally pay higher wages and¶ offer steadier employment than firms that do not export (Richardson and¶ Rindal 1996). social.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade US Economy FTAA is integral to US trade strategy. AS) The United States has two overarching goals in pursuing an FTAA: (1)¶ free trade in the Americas is an integral component of a global US trade¶ strategy designed to reduce barriers to trade and investment and thereby¶ increase US trade. Moreover. 11/27/10. and political problems.pdf. It will also avert discrimination against US-based pro-¶ ducers as a result of free trade pacts that those countries have or may sign¶ with each other and with the European Union. and the productivity and income of US¶ workers.12 US firms and US work-¶ ers both benefit. The same applies to US firms that invest abroad. such pacts have forced US firms to source their ex-¶ ports from their foreign instead of domestic production plants. 10 (Institute for International Economics. Breaking down Latin American¶ trade barriers will yield important new opportunities for US firms to ex-¶ port and invest. In some cases.11¶ The trade objective is straightforward. to the¶ detriment of US workers.piie. the FTAA would help level¶ the playing field for US-based exporters by reducing discrimination that¶ results from other FTAs in the region to which the United States is not a party. accessed 7/6/13. Institute for International Economics.” http://www. . production. and (2) the FTAA is the linchpin of the broad array of summit¶ initiatives that seek to promote closer cooperation in the hemisphere on¶ pressing economic. “The FTAA: Objectives and National Interests. because¶ they also are significant exporters.com/publications/chapters_preview/103/3iie275x.

whose¶ bilateral trade— as projected by gravity models—could expand two or threefold in response¶ to FTA-type reforms. Second.¶ mostly involving agricultural goods. Schott.iie. socio-economic. Of course.¶ By "locking in" open access to markets.¶ promoting education.pdf. For many¶ countries. these products have been immune to deep MFN¶ reforms and often are excluded from FTA or unilateral trade preferences. the FTAA initiative covers the one big gap in the free trade matrix of the¶ Western Hemisphere. and cultural issues (e.'' At the same time. linking the major economies of North and South America. the value of their bilateral FTAs and the FTAA is more secure access to the US¶ market since these trade pacts turn their unilateral preferences into contractual obligations. Progress on the FTAA is critical to sustain efforts in these other areas.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Latin American Economy Expansion of the FTAA yields economic benefits essential to development strategies. Third. AS) Why then bother with a FTAA? The short answer is that an FTAA would yield both¶ economic and foreign policy benefits. there are a few notable exceptions. Institute for International Economics. free trade pacts help reduce uncertainty about the¶ future course of trade and regulator)' policies and thus facilitate business planning and¶ investment. the FTAA is the economic engine that drives¶ hemispheric cooperation on more than 20 initiatives undertaken by leaders at the Summit of¶ the Americas involving a number of political. this benefit is a key to the success of their¶ investment-led development strategies. accessed 7/4/13. . the FTAA would have beneficial effects on the¶ conduct of overall economic policy in and economic relations among the participating¶ countries. “Does the FTAA Have a Future” http://www.com/publications/papers/schott1105. Institute for International Economics. November 2005. Senior Fellow..'¶ Many LAC countries already have open access to the US market for most¶ merchandise products because of CBI and ATPA preferences. and perhaps most important. or because US most favored¶ nation (MFN) tariffs are zero or very low. strengthening the rule of law. First. and protecting the rights of indigenous¶ peoples). the hemisphere wide FTA would help harmonize¶ over time the separate free trade regimes that have been negotiated among regional trading¶ partners.g. 5 (Jeffrey J. For many developing countries.

US-Brazil trade would be about $86 billion. and reinforcing democracy. if Mexico were transplanted to Brazil but remained a NAFTA member.com/publications/chapters_preview/103/3iie275x. and educational reform. the potential trade expansion from a free trade pact with growing markets in Latin America. environmental and labor measures. democracy. geography. the prospect of improved trade relations can act as a magnet¶ for attracting support in the LAC countries for other important US political and foreign policy goals. During the 1990s. to a cumulative $223 billion in 1999 (on a historical cost basis). This point is well¶ illustrated by the 2000 Mexican presidential election.” http://www.piie. which demonstrated¶ the salutary effect of economic integration on political reform. US FDI in the region tripled. US trade and investment ties to the LAC region seem more¶ modest if one excludes Mexico.¶ improving environmental and labor conditions. almost¶ three times greater than the actual volume in 2000 of $29 billion. To¶ achieve these gains. including cooperation on drug interdiction. drug cooperation. how¶ much trade would it conduct with the United States? Updating the analysis with data for 2000.¶ To be sure.¶ Furthermore.¶ However.pdf. an FTAA could have important¶ spillover effects on overall US relations with the region. The FTAA would help strengthen the economic¶ foundation on which LAC countries have built their democratic societies. representing 13 percent¶ of all US FDI. supporting educational¶ reforms.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Laundry List FTAA expansion in Latin America leads to economic growth. . and per capita income). would be significant. AS) US investors also have a significant interest in the Latin American¶ economies. In other words. Schott and Hufbauer (1999) estimated the potential¶ increase in US-Brazil trade if Brazil received the same trade treatment as¶ Mexico in the US market (adjusting for differences between Mexico and¶ Brazil in size. almost 60 per-¶ cent of US investments in the LAC region were in Brazil (S35 billion) and¶ Mexico ($34.¶ Second. 10 (Institute for International Economics. if comparable to the growth achieved un-¶ der NAFTA. Using a gravity model developed by¶ Jeffrey Frankel (1997).'4 Excluding FDI in offshore financial centers. most US and Brazilian trade barriers would¶ have to be covered by the free trade pact. “The FTAA: Objectives and National Interests. where the NAFTA is already in effect.3 billion). Thus. 11/27/10. Free Trade Institute for International Economics. accessed 7/6/13. however. the United States benefits when its neighbors prosper and democratic processes deepen.

and is likely to incite new protectionist demands.piie. 11/27/10. the FTAA—in conjunction with ongoing subregional integration¶ pacts and domestic regulatory reforms— would make regional infrastructure projects more viable and thus strengthen economic linkages between¶ partner countries. investors¶ will still look first and foremost at macroeconomic conditions in setting¶ their investment priorities. accessed 7/6/13. reforms required to implement FTAA obligations would promote transparency of public policies and contribute to efforts to combat corruption. AS) Why would the LAC countries agree to such asymmetric liberalization?¶ The short answer is that the FTAA would also be a good deal for them as¶ a complement to and integral component of their overall economic development strategy. the FTAA would provide an "insurance policy" against new¶ protectionism at home and abroad. industrial restructuring also adds to adjustment pressures¶ within each economy. the existence of NAFTA contributed to US¶ leadership in crafting the peso rescue package in early 1995. since the Miami Summit.¶ First. In so doing firms will be able¶ to lower their costs and increase productivity through economies of scale¶ in production and intra-industry specialization. the physical integra-¶ tion of the Latin American economies has been accelerated by construct-¶ ing natural gas pipelines.com/publications/chapters_preview/103/3iie275x.¶ Second. To¶ maintain political support for the FTAA reforms. and expanding¶ road and rail networks. For example. the FTAA would strengthen each country's interest in the economic health and political stability of the other members. In conjunc-¶ tion with broad domestic economic reforms. It is worth underscoring why the FTAA is important for¶ developing countries in the LAC region. and Uruguay to take decisive action in opposition to the attempted¶ coup in Paraguay in 1996. 10 (Institute for International Economics.¶ To be sure.¶ Third. It would thus help governments¶ withstand the protectionist demands of their domestic lobbies and ensure¶ that access to the markets in partner countries remains open.9 Participa-¶ tion in the FTAA would also reinforce national economic reforms. “The FTAA: Objectives and National Interests. . the FTAA would substantially raise the cost of policy reversals. Much of the benefit will derive from the removal of restrictions to economic activity¶ within each country. standardizing¶ customs and other national trade practices. dampening inflation. In addition. and creating a framework for¶ managing trade relations among the partner countries.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Corruption/Latin American Economy Latin American FTAA expansion ensures economic growth for all members and stops corruption. but countries also will gain from being able to trade¶ and invest across a broad regional market. By establishing international obligations that effectively lock in domestic reforms.pdf. Institute for International Economics. This is impor-¶ tant because problems in one country often spill over to neighbors and¶ trading partners. countries will thus also¶ need to pursue domestic programs that help affected workers retrain and¶ companies retool for the new opportunities expanding markets create. and promoting investment from both domestic and foreign sources. the FTAA¶ would not be the most important factor in attracting investment.¶ Brazil. making¶ these countries more attractive to foreign investors.¶ maintaining the integrity of Mercosur prompted leaders of Argentina. To be sure.” http://www. Indeed.¶ Fourth. Similarly. the FTAA would help promote economic growth by spurring¶ competition in domestic markets. the FTAA would promote increased trade and investment by eliminating trade barriers. interconnecting power grids.

pdf. “Labor Standards and the Free Trade Area of the Americas.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Worker’s Rights The FTAA explicitly includes promoting worker rights as part of its mission. there is no trade-off between these principles and development. and freedom from discrimination— are part of the summit-FTAA process because they ¶ strengthen both markets and democracy. The core labor standards—freedom of ¶ association and the right to organize and bargain collectively. as ¶ the FTAA is intended to do. AS) The Miami Summit launching the Free Trade Area of the Americas (FTAA) process recognized that free¶ markets and free societies work best when they work together. Research Fellow. accessed 7/6/13. indeed. 3 (Kimberly Ann. in an environment that promotes democracy and market-oriented economies.iie. Institute for International Economics. regardless of the level of development of the country or the sector ¶ where they work. freedom from forced labor. And.com/publications/wp/03-7. These core standards are broadly recognized as fundamental ¶ rights to which all workers are entitled. . Institute for International Economics. they ¶ become mutually reinforcing.” http://www. the abolition of ¶ child labor. Elliott.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional Trade Agreements .

It is through bilateral. and New Zealand. The RCEP nations are aiming to wrap up their negotiations two years from now. China. and the proposed US-EU.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional Key To Global . EU-Japan. or EU. Clearly.S. at the end of 2015.S. but is not currently negotiating with the U. The real breakthrough here is that big economies-U. 2013.S. accessed 7-12-13 BLE] Whatever the outcome in December. this means monitoring the substantive results of the major new regional and trans-regional trade negotiations that have been launched. intellectual property advances. Why do I think this is possible and politically the most attractive option? First. scholar at the American Enterprise Institute. and many more being negotiated. Trade Representative.com/articles/2013/05/01/a_realists_view_of_the_global_trading_ system_100293. and many do include some services. Japan. It is true that many of the FTAs are shallow. the EU-Korea FTA. just look around at where liberalization is occurring (beyond the substantial unilateral barrier reduction by individual nations). EU-are now negotiating with each other. the outlier is China. . WTO members belong to 13 FTAs. are the relatively new regional and bilateral agreements that do tackle head on behind-the-border barriers to trade and investment. that includes all of the ASEAN nations. The negotiating timetables are important for future WTO negotiations. breaking the older FTA model of larger countries negotiating "hub and spoke" FTAs with many small countries. Specifically. May 1.. with future eligibility for all APEC nations. investment.-Korea FTA. and do not cover many "21st century. In my view. health and safety regulations and labor and the environment.html. Japan-EU and Canada-EU-are either completed or have deadlines within the next year or so.Negotiations Regional and bilateral trade key to world trade negotiations Barfield. Of greater import. Examples on the bilateral level include the U. In effect. Korea. former consultant to the office of the U. and the Regional Comprehensive Economic Partnership (RCEP) agreement. Most of key bilateral FTAs-US-Korea. The TPP has set a goal of completion by the end of 2013 (with a more likely date of mid-2014). There are now over 300 bilateral trade agreements in operation. however. plus Australia. On average. 13 *Claude. inside-the-border issues.S. Korea-EU. investment and other regulatory reforms. which is a member of RCEP that includes Japan. the world trading system is almost certainly in for a time of reflection and retrenchment before moving forward on major new trade issues-so-called 21st century challenges: the impact of supply chains and state-owned enterprises on trade policy.realclearmarkets. the most realistic avenue to future advances will come from building from the ground up. services. These "deep integration" FTAs in turn will provide a partial template for much larger regional FTAs that are being negotiated: the Trans-Pacific Partnership Agreement (TPP) that now includes 12 trans-Pacific nations. either directly in within a larger regional framework. India. and Canada-EU FTAs. http://www. China. “A Realist's View of the Global Trading System”. the trading world is witnessing a real time experiment on how far and how fast renewed liberalization can go on a bilateral and regional basis. But most provide zero tariffs in the near future for over 90 percent of manufactured goods. Japan. plurilateral and regional trade agreements. or are in process of being launched-and then gleaning these new liberalization commitments as the foundation for a new multilateral trade round several years down the road.

regional initiatives have been no more successful – and in some cases less successful – than activity at the multilateral level. RTAs are violations to WTO's non-discrimination principle. In some particularly sensitive areas. . It needs to be acknowledged. which requires a member country to extend to all WTO members the privileges that it grants to one contracting party. The question then arising is how regional arrangements might impinge upon. WTO views RTAs to be good and encourages the formation of free trade areas and customs union. that even were multilateral disciplines to be strengthened. or co-exist with. and the provisions embodied in them. RTAs are in fact helpful to world trade liberalization. However. The first lesson is that many consequences of regional trade agreements activity bolster the case for a strengthened multilateral framework. Together. these two elements have yielded highly effective synergies between approaches at the regional and the multilateral levels. http://intl. Its purpose is to examine regional groups and to assess whether they are consistent with WTO rules. This applies particularly to the contribution of regionalism to divergence from the rules of the multilateral system. “Regional Trade Agreements”. the scope for drawing upon arises from the extent to which RTAs go beyond the WTO. there are features of regional approaches that may nevertheless complement such strengthening or even be drawn upon in designing strengthened multilateral rules. accessed 7-12-13 BLE] Essentially. This basic principle is defined in the Most-Favored-Nation (MFN) rule. January 2000.htm. Article 24 of GATT regulates that RTAs should trade more freely among their member countries without raising barriers on trade towards the outside world. the WTO General Council created a Committee on Regional Trade Agreements (CRTA). The second lesson we can draw from experience with regionalism is that while some consequences of RTA activity contribute to the case of strengthening the multilateral framework. These elements are compounded by the fact that regionalism has often failed to crack the hardest nuts. any multilateral disciplines. Organisation for Economic Co-operation and Development. RTA rules can pave the way for WTO multilateral negotiations. Regional trade agreements improve global trade liberalization Holland. 5 [OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. http://www. To ensure that RTAs can improve regional trade liberalization without hurting global trade liberalization.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional trade bolsters global trade rules and provisions OECD. 2k [Tom. writer for International Economics. to the effects which the patchwork of regionalism can have on non-members of those agreements and to the role of regionalism in raising transaction costs for business. The scope for complementarity arises from the contribution which regional initiatives can make towards harmonisation of rule making. would not disappear. In addition.cuhk. accessed 7-12-13 BLE] Two broad policy lessons can be drawn from OECD work on regional trade agreements. RTAs. “Regional Trading Agreements”.econ.org/tad/benefitlib/regionaltradeagreements.edu.oecd.php?did=14#ref.hk/topic/index. smaller numbers of parties are involved in RTAs. however. then similar political and economical interests can be easily processed. Compared with multilateral negotiation systems. 2005.

As Miles Kahler argues. PTA members that trade extensively have a strong incentive to avoid military confrontations. 2000.’’ 29 By jeopardizing existing trade relations and the realization of potentially significant future economic beneŽ ts.stanford.pdf.32 .edu/class/polisci243c/readings/v0002091. The institutional mechanisms that PTAs provide to deepen integration and avert the future breakdown of economic relations help to ensure that ties between key trade partners will be sustained.30 Although the effects of hostilities on both trade  ows and a PTA’s vitality may not be immediate. and International Conflict”. “Trade Blocs. military conflict threatens to exact a particularly heavy toll on states that have dense commercial ties and belong to the same PTA.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regionally trading countries avoid military confrontation Mansfield & Pevehouse. 31 As such. http://www. however. if not expanded. extensive economic interaction within a regional institution contributes to ‘‘perceptions that enhance the prospects for cooperation and reinforce institutions: an expectation that interactions will continue and a declining discount rate in evaluating future payoffs from those interactions. accessed 7-12-13 BLE] For states that trade heavily. the future stream of gains from participating in a preferential arrangement is likely to appear especially large. Trade Flows. 2k *Edward & Jon. drawing in other members and gradually undermining the arrangement itself as well as economic relations among participants. con• icts can persist and escalate. political science professors at the University of Pennsylvania.

KB) Sourcing intermediate goods efficiently is essential for a country’s production capacity. ¶ intermediate goods. accessed 7-1213. Because proximity to markets matters. ¶ This is as true for regions as for countries.pdf.pdf. accessed 7-1213. suggesting large payoffs from cross-country infrastructure ¶ investments and trade-related reforms. KB) The new economic geography shows that scale economies in the productive sectors. the relation being stronger ¶ beyond a threshold of global competitiveness. What about developing neighborhoods? This paper ¶ proposes a closer look at the issue using COMTRADE aggregate exports of capital goods.org/INTWDR2009/Resources/4231006-1204741572978/Coulibaly. The World Bank. which mainly involves local and regional entrepreneurs.Volume Strong correlation between regional trade and global trade Coulibaly. 8 (Souleymane Coulibaly.org/INTWDR2009/Resources/4231006-1204741572978/Coulibaly. The World Bank. while others serve both regional and ¶ domestic markets. The stylized facts ¶ and econometric analysis conducted in this paper indicate that regional trade in intermediate ¶ goods can boost exports overall. The World Bank’s Senior Country Economist for Armenia. domestic supply constraints seem more binding for the ¶ efficiency of regional trade. Scale economies and factor mobility increase export ¶ flows. These results call for a two-pronged policy action ¶ encompassing regional and global integration and putting a sub-set of Sub-Saharan countries ¶ close to that global competitiveness threshold at the heart of a neighborhood growth strategy Regional trade is key to global trade – can’t have one without the other Coulibaly. consumer goods and raw materials for 2002-06 to evaluate the impact of a ¶ country import of intermediate goods from its neighbors on its global export performance using a ¶ granger-causality test based on an extended-gravity model. we find a strong positive correlation between countries previous regional import of ¶ intermediate goods and their current exports. North America and Northeast Asia. Firms exporting to regional markets are hurt ¶ more by power outages and inefficient border crossing procedures than are firms exporting to ¶ global markets (Yoshino (2007)).” http://siteresources.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional Key To Global . 8 (Souleymane Coulibaly. 2/28/08. “On the Complementarity of Regional and Global Trade. 2/28/08.” http://siteresources. while higher transport costs reduce them. This ¶ illustrates well the findings of the heterogeneous firm framework where efficiency differences ¶ constrain some firms to service only the domestic markets. Many empirical works have documented the sharp increase in intra-industry ¶ trade and particularly trade in intermediate goods within developed neighborhoods such as the ¶ EU. For Sub-Saharan African countries ¶ particularly. “On the Complementarity of Regional and Global Trade. facilitated by ¶ factor mobility and reduced transport costs. regional trade ¶ might be more sensitive than global trade to the three drivers of agglomeration.worldbank. regional. So. The World Bank’s Senior Country Economist for Armenia. Countries ¶ located in a neighborhood providing a wide range of intermediate goods cheaply available can ¶ take advantage of scale economies to reduce their production costs and improve their global ¶ competitiveness. increase competitiveness and lead to faster growth. A sound regional .worldbank. with the most efficient involved in domestic. indicating that developing neighborhoods are also ¶ experiencing such complementarity between regional and global trade. and international ¶ exports.

It uses ¶ Staal (2004) show that small countries are more in favor of integration while large countries prefer ¶ integrating with countries of equal size. in the today just-in-time and global specialization world. and global integration to scale up market and supplier access. However. COMTRADE data to unveil the underlining relation between these two trade flows. proximity is an asset if countries ¶ manage to build neighborhoods in which they can all reap the benefit of scale economies. Regional integration policies ¶ that help to build up the supply capacity of a region through targeted multicountry infrastructures as well as policy reforms facilitating cross-border activities can boost individual countries’ ¶ economic performance. Regional trade amplifies global trade Coulibaly. and Hoekman and Njinkeu (2007) for ¶ further discussion on rules of origin issues. the demand-led growth will come from trade with developed countries ¶ where the world’s strongest demand comes from and where the most efficient input suppliers are ¶ located. the complementarity between ¶ regional and global trade is amplified. This ¶ ¶ complementarity is confirmed both by an increasing number of empirical works. global trade debate. This . ¶ Regional and global integration can be thought of as complements. for any ¶ developing countries. by looking at the¶ correlation between countries regional import of intermediate goods and their exports. global integration debate in a two pronged policy approach encompassing regional and global integration: regional integration to ¶ scale up local supply capacity. calling for a twopronged policy action: a regional integration policy to scale up countries supply capacity. The World Bank’s Senior Country Economist for Armenia. Indeed. KB) This paper proposes a genuine look at the regional vs. 8 (Souleymane Coulibaly. Many empirical works have documented the sharp increase in intra-industry ¶ trade and particularly trade in intermediate goods within developed neighborhoods such as the ¶ EU. and the ¶ ¶ experience of today developed neighborhoods. ¶ Sourcing intermediate goods efficiently is essential for a country’s production capacity. Various specifications of the ¶ model lead to same results: previous import of intermediate goods significantly and positively ¶ affect current exports.org/INTWDR2009/Resources/4231006-1204741572978/Coulibaly.¶ Based on this framework.” http://siteresources. we can reframe the regional vs. start small. This suggests that policy interventions to increase regional ¶ trade can also improve the global competitiveness of developing countries. accessed 7-1213. successful neighborhoods of developed ¶ ¶ countries provide useful clues from the design and implementation of regional and global ¶ ¶ integration initiatives: think global. 2/28/08. the relation appears to be non-linear: ¶ beyond a threshold value of regional import of intermediate goods. “On the Complementarity of Regional and Global Trade. ¶ 5¶ See Collier and Venables (2007). and estimates ¶ an extended-gravity model in a granger-causality type of analysis. factor ¶ mobility and low transport costs to sustain their production capacity. and compensate the least fortunate members. ¶ Indeed. and a ¶ global integration policy to scale up the demand they face. and global integration. Cadot and De Melo (2007). The World Bank. Countries ¶ located in a neighborhood providing a wide range of intermediate goods cheaply available can ¶ take advantage of scale economies to reduce their production costs and improve their global ¶ competitiveness.pdf.worldbank. Global integration policies are essential to scale up the demand faced by ¶ ¶ developing countries and provide them access to efficient intermediate goods’ suppliers.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade integration policy can solve the supply problems of domestic and ¶ regional firms. the demand problems of all three types of firm. For Sub-Saharan Africa particularly. North America and Northeast Asia.

One such agreement is the North American Free Trade Agreement (NAFTA).¶ bilateralism has emerged as the¶ preferred avenue for arriving at¶ multilateralism eventually. May 2008.. 8 [Douglas A.html. professor of economics at Dartmouth College. across the globe.org/library/Enc/InternationalTradeAgreements.¶ irrespective of their state of¶ development.” http://www. KB) The study so far has attempted¶ to analyse the key trends in regional¶ trade agreements across the globe¶ including India. which have emerged out of¶ the study. and Mexico agreed to phase out all tariffs on merchandise trade and to reduce restrictions on trade in services and foreign investment over a decade. Canada.com/op/op120. Presently. Under the terms of NAFTA. although the non-linearity of the process does not allow many of them ¶ to fully take advantage of this driver of global competitiveness. the United States. trade. many countries have turned away from the multilateral process toward bilateral or regional trade agreements.¶ therefore. The need for such¶ regional trade agreements has¶ arisen from a number of socioeconomic. An attempt has also been made¶ to identify possible broad strategies.¶ Bilateral regional trade¶ agreements continue to¶ proliferate. “Regional Trade Agreements: Gateway to Global Trade. accessed 7-12-13 BLE] As a result. Export-Import Bank of India. 7 (October 2007. makes an attempt to¶ highlight key observations from the¶ study.eximbankindia.econlib. The Premier Export Finance Institution. This calls for coordinated policy ¶ interventions in these neighborhoods to jumpstart and exploit the complementarity between ¶ regional and global trade in at least some countries close to the threshold of global ¶ competitiveness. http://www. it is¶ crucial to briefly outline the key¶ trends. With a¶ view to project this central feature in¶ global economic integration.¶ Physical geographical borders¶ cease to be a hindrance in the¶ endeavour to foster and¶ strengthen intra and extra¶ regional linkages and economic¶ cooperation. This could be particularly¶ buttressed by the gradual weakening¶ of progress in multilateral¶ negotiations. formerly served on the staff of the President’s Council of Economic Advisers and on the Federal Reserve Board. in tune with¶ global trends and development. Emerging trends in¶ economic integration attests to the fact¶ that bilateral and plurilateral¶ integration stand as effective avenues¶ through which economies. would enhance their¶ global integration. which went into effect in January 1994.¶ more than one third of the¶ world’s trade takes place within¶ the framework of such¶ agreements23 Regional trade agreements hasten global trade Irwin.¶ which India could adopt. The United States also . Therefore. The following section. political and security¶ considerations.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade paper shows that the same process is underway in ¶ developing neighborhoods. The gradual¶ erosion of faith in¶ multilateralism has given a new¶ thrust to the concept of¶ regionalism as a highly effective¶ tool for expanding international¶ 6. “International Trade Agreements”. Regional trade between neighboring countries increase international trade Export-Import Bank of India. accessed 7-12-13. economic cooperation¶ and global integration.¶ General Observations¶ There exists an increasing¶ interest among countries to¶ establish regional trade blocs¶ and to partner with¶ neighbouring countries in the¶ region as well as with distant¶ countries and trading blocs. The recent spur in¶ such agreements indicates that the¶ trend is likely to continue in the years¶ to come.pdf. as¶ progress on the WTO based¶ multilateral trade talks has¶ remained subdued and talks¶ have been mostly inconclusive¶ in recent times.

They may also hasten global trade liberalization if multilateral negotiations run into difficulties.” wherein countries are challenged to reduce trade barriers to keep up with other countries. the EU sought and eventually signed a free-trade agreement with Mexico to ensure that European goods would not be at a competitive disadvantage in the Mexican market as a result of NAFTA. and the Pacific. Asia. The European Union also has free-trade agreements with other countries around the world.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade has bilateral agreements with Israel. . The advantage of such bilateral or regional arrangements is that they promote greater trade among the parties to the agreement. and Australia and is negotiating bilateral or regional trade agreements with countries in Latin America. shortly after NAFTA was implemented. Proponents of these agreements have called this process “competitive liberalization. Jordan. Recalcitrant countries excluded from bilateral agreements. For example. may then be induced to join and reduce their own barriers to trade. and hence not sharing in the increased trade these bring. Singapore.

http://www. The United States is sometimes viewed as preoccupied with NAFTA or APEC.org/bitstream/handle/10986/3799/WPS5314. The most threatening of these challenges do not arise in the countries that have rejected openness most strongly in the recent past. with preferential liberalization these standard gains from trade liberalization are not guaranteed.com/publications/wp/wp.worldbank. there are concerns that the trend towards regionalism could have damaging long-run effects on external trade liberalization and on the multilateral trading system. “Regional Trade Agreements”. nurtured. Figure 1 shows the evolution of the average number of RTA partners for the current members of the World Trade Organization (WTO): the average WTO member now has agreements with more than 15 countries!1 Gains from such increased openness to trade stem from resources flowing to their most productive uses and lower consumer prices. 96 *C. “Competitive Liberalization and Global Free Trade: A Vision for the Early 21st Century”. accessed 7-12-13 BLE] Regional trade agreements (RTAs) are proliferating. Paradoxically. Welfare effects depend on whether trade increases primarily at the expense of nonmembers. founding director of the Peterson Institute for International Economics. the strongest pressures to reverse the liberal course can be found in the countries that created. This is one key reason why a new initiative is now required to consolidate the regional liberalization initiatives into an agreement to achieve global free trade in the 21st century. However. although some of them do harbor lingering doubts that could again assume ascendance. and Brazil might be happy to leave its new leadership of that region undisturbed for at least a while.cfm?ResearchID=171. accessed 7-12-13 BLE] Moreover.iie. Furthermore.pdf?sequence =1. By joining East Asia and North America. There is a constant need to keep the global-regional interaction on a supportive course. the developing and former command economies. May 2010. South America might decide to halt its liberalization once Mercosur had consolidated. January 1996. APEC has eliminated any possibility of the evolution of the three-bloc world that was so widely--and rightly--feared a few years ago5 but a failure to work out accommodations with Europe could instead create a two-bloc world that would convey substantial dangers as well. https://openknowledge. Fred.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional Prevents Global Regional trade damages the multilateral trading system Freud & Ornelas. . 10 *Caroline & Emanuel. and championed the postwar order: the United States and the European Union. The World Bank Development Research Group--Trade and Integration Team. There are other risks to the continued triumph of competitive liberalization that need to be met by a new global initiative. the European Union frequently seems to focus so heavily on its regional agenda that it forgets its global responsibilities. Regional trade agreements distract from global trade responsibilities Bergsten.

As increasing amount of global trade is being diverted through this route. accessed 7-12-13 BLE] The traditional theory of gains from trade suggests that removal of trade barriers allows consumers and producers to purchase from the cheapest and most competitive source of supply. October 11. Their effects on global trade liberalization and economic growth are not clear given that the regional economic impact of RTAs is ex ante inherently ambiguous”. a cornerstone of the multilateral trading system. Regional trade agreements represent an important exception to the WTO's principle of nondiscrimination. This enhances efficiency and increases welfare. because of the RTA. in his seminal contribution. Pp. October 11. WTO Member countries that are not a part of the RTA lose out in these markets. help to build and strengthen it. countries within a RTA can trade among themselves using preferential tariffs and easier market access conditions than what is applicable to other WTO Member countries. 27 Regional trade causes trade diversion—hurts global trade Pal.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Regional trade agreements are discriminatory—harms global trade Pal. the number of RTAs notified to the World Trade Organization (WTO) has crossed 250 in 2003 and estimates indicate that over 300 RTAs will be in effect by 20071. Initially WTO encouraged the growth of RTAs because it believed that regional integration initiatives can complement the multilateral trade regime.org/feathm/may2004/survey_paper_rta. In this case. As a result. 2011. From about 50 till 1990. efficiency gains arise from both production efficiency and consumption efficiency. Following this logic. http://www. due to the formation of the regional agreement. This view was first challenged by Viner in his 1950 book titled The Customs Union Issue6. 11 *Parthapratim. Associate Professor of Economics. trade diversion takes place if. 2011. The WTO Annual Report 2003 expresses deep concern about this latest development and comments: “RTAs can complement the multilateral trading system. http://www. However. accessed 7-12-13 BLE] One of the most striking development in the world trading system since the mid 1990s is a surge in Regional Trade Agreements (RTAs). Associate Professor of Economics. Trade diversion lowers welfare of .networkideas. Viner pointed out that RTAs can lead to trade creation if. it was traditionally believed that regional trade blocks should generate gains from trade as member countries reduce trade barriers among themselves. RTA members switch from inefficient domestic producers and import more from efficient producers from other members of the RTA. they are a departure from the MFN principle. According to the WTO rules. there is a certain amount apprehension about the role of regional trade agreements in WTO. “Regional Trade Agreements in a Multilateral Trade Regime: An Overview”. Viner. introduced the concepts of ‘trade creation’ and ‘trade diversion’ and showed that the net effect of trade liberalization on a regional basis is not unambiguously positive. 11 [Parthapratim. members switch imports from low-cost production in the rest of the world and import more from higher-cost producers in the partner countries.pdf.org/feathm/may2004/survey_paper_rta.pdf. On the other hand.networkideas. “Regional Trade Agreements in a Multilateral Trade Regime: An Overview”. But by their very nature RTAs are discriminatory. the high proliferation of RTAs in global trade and increased diversion of trade through this route is increasingly becoming a cause for concern for the multilateral trading system under WTO. Also trading within the regional trade blocks does not come under the purview of WTO.

p.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade not only the partner countries but the rest of the world also. one at least of the member countries is bound to be injured. the two combined will suffer a net injury. 44) . In Viners’s own words: “…where the trade-diverting effect is predominant. 1950. and there will be injury to the outside world and to the world at large.” (Viner.

unige. such an arrangement is still preferential. and quite different concept is open access whereby the RIA announces that any country willing to abide by its rules may join. from the point of view of existing members.ch/ses/ecopo/demelo/Cdrom/RIA/Readings/Trade_Blocs_Chap05. In terms of the economics. Its main importance would be as a stepping stone to multilateralism: Could an open access RIA attract an increasing number of members. But for deeper agreements. Perhaps the best example is the Cross-Border Initiative in East and southern Africa.pdf. there is generally an optimal size for a RIA. In practical terms. giving discriminatory benefits to members. accessed 7-12-13 BLE] A second. http://www. to the point where almost all countries became members? Analytical treatments of this issue are not optimistic. open access is harder to envisage.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade A2: Leads To Global Regional trade agreements are not a stepping stone to multilateral trade World Bank. As we saw in chapter 4. then open access can be quite easily envisaged. 2k *A World Bank Policy Research Report. the feasibility of open access depends crucially on the depth of the scheme. in which neither internal preferences nor external tariff harmonization are rigorously enforced. . “Trade Blocs”. Where a RIA involves few conditions. so it is not clear why members should want unrestricted access.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic Freedom .

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic Freedom Good .

heritage. and eroding people’s trust in both business and .org/index/book/chapter-7. the intensity of poverty in countries whose economies are considered mostly free or moderately free is only one-fourth the level in countries that are rated less free. Poverty rates have declined more significantly in freer countries as well. Privileges limit the prospects for mutually beneficial exchange—the very essence of economic activity.heritage. Mercatus Center at George Mason University. http://www. KB) Government-granted privileges are pathological. Over the long run. accessed 6-30-13. Center for International Trade and Economics.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade List Economic freedom is good – laundry list Miller and Kim. “Defining Economic Freedom. For countries that achieve scores that reflect even moderate levels of economic freedom (60 or above). KB) The most basic benefit of economic freedom. The societal benefits of economic freedom extend far beyond higher incomes or reductions in poverty. “The Pathology of Privilege: The Economic Consequences of Government Favoritism”. Lack of economic freedom causes laundry list of impacts Mitchell.” http://www.¶ Given the strength and empirical durability of the relationship between higher levels of economic freedom and greater prosperity. hardworking. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation. They pad the pockets of the wealthy and well-connected at the expense of the poor and unknown.org/index/book/chapter-4.¶ When governments dispense privileges. Countries with higher levels of economic freedom enjoy higher levels of human development. smart. 12 (Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University. Anthony Kim is a Policy Analyst in Heritage's Center for International Trade and Economics. 12 (Ambassador Terry Miller is the Director of the Center for International Trade and Economics (CITE) and the Mark A. blurring the distinction between productive and unproductive entrepreneurship. they threaten macroeconomic stability. They raise prices.5 billion people. accessed 6-30-13. including better education and more comprehensive health care. fostering cronyism. confirmed now with data covering 19 years. Countries moving up the economic freedom scale show increasingly high levels of average income. lower quality. Privileges even undermine cultural mores. The governments of China and India bear a special responsibility in this regard.”¶ Greater levels of economic freedom have had a major positive impact on poverty levels over the past decade. and in the short run. the relationship between economic freedom and per capita GDP is highly significant. is the strong relationship between economic freedom and levels of per capita income. it can only be regarded as a human tragedy that the majority of the world’s people still live in countries where economic freedom is either repressed or heavily regulated. Based on the United Nations Multidimensional Poverty Index. The policy environments that they set for economic activity affect the lives of more than 2. Both economies are considered “mostly unfree. privileges depress economic growth. They live in cleaner environments and do a better job of making the most efficient use of energy and other natural resources. and creative people are encouraged to spend their time devising new ways to obtain favors instead of new ways to create value for customers. and discourage innovation.

econlib.¶ For all the social problems they create. 8 (Robert A. These figures indicate the relationships that more scholarly studies have found. That.” http://www. the results are uniform: measures of economic freedom relate positively with these factors. income equality. gender equality. but they are not conclusive evidence. The simple graphs on the next page are no substitute for more scholarly work. accessed 7-1-13.html#. Lawson. “Economic Freedom. government-granted privileges can be extraordinarily valuable to the individual firms that receive them. Free Trade Studies prove – economic freedom ha a direct relationship with economic growth. unfortunately. appears to be related to both the level of economic freedom and changes in the level of economic freedom as well as to investment in physical and human capital. .¶ The figures that follow illustrate the simple relationship between the economic freedom index and various measures of economic and social progress. can make these firms powerful opponents of economic liberalization. these simple relationships are a starting point for examining the links between economic freedom and economic results. Economic growth. While there is scholarly debate about the exact nature of these relationships.3 Nevertheless. life expectancy. gender equality. Library of Economics and Liberty.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker government. for example. Professor of Economics at Capital University. and more Lawson. and so on.org/library/Enc/EconomicFreedom. higher incomes. KB) Much scholarly research has been and continues to be done to see if the index correlates with various measures of the good society: higher incomes. economic growth.

as a matter of natural right. Any discussion of economic freedom has at its heart reflection on the critical relationship between individuals and the government. Ph. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation. Congregations own churches where they practice religious freedom. “No man would become a member of a community. liberty.” the Declaration of Independence asserted America’s liberty by appealing to man’s fundamental rights to “life. Ph. Matthew Spalding.. which facilitate the freedom of the press.heritage. is one of the natural.org/index/book/chapter-7. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation. accessed 6-30-13. Kenneth Simon Center for American Studies at The Heritage Foundation.”*1+¶ The right to own property protects other freedoms. Newspapers own printing presses. 12 (Ambassador Terry Miller is the Director of the Center for International Trade and Economics (CITE) and the Mark A.” Supreme Court Justice William Paterson wrote in 1795. is Director of the B.D. KB) Ambassador Terry Miller is the Director of the Center for International Trade and Economics (CITE) and the Mark A. “Why Does Economic Freedom Matter?” http://www. 11 (Kim R. and having it protected. inherent. “Defining Economic Freedom. without which a person’s rights to life. Business property produces goods and services to trade in an open market.org/research/reports/2011/04/why-does-economic-freedom-matter. just as intellectual property protects ideas and innovation.D. As Friedrich Hayek once observed. The right to property guarantees the means to live in freedom and practice self-government.. Home ownership contributes to the financial well-being and security of families. Anthony Kim is a Policy Analyst in Heritage's Center for International Trade and Economics.” http://www. liberty. Holmes. in which he could not enjoy the fruits of his honest labour and industry. a free and responsible being with inalienable dignity and fundamental liberties that righteous and effective political systems should regard as unassailable. and the pursuit of happiness may be fundamentally compromised.” And the pursuit of happiness the Founders understood to require the protection of property because the right to enjoy the fruit of one’s labor is a fundamental tenet of liberty. Anthony Kim is a Policy Analyst in Heritage's Center for International Trade and Economics Economic freedom is the condition in which individuals can act with autonomy while in the pursuit of their economic livelihood and greater prosperity.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Rights Economic freedom is a fundamental right that protects other freedoms Holmes and Spalding. and the pursuit of happiness. Heritage Foundation. Economic freedom is a fundamental right – infringement impacts other rights Miller and Kim. is Vice President of Foreign and Defense Policy Studies at The Heritage Foundation.¶ “It is evident that the right of acquiring and possessing property. Center for International Trade and Economics. accessed 6-30-13. “To be controlled in our economic pursuits means to be controlled in everything.heritage. .¶ Economic freedom is an essential aspect of human liberty.”2 Hayek’s keen insights on economic freedom are based on the moral truth that each person is. KB) In light of that “long train of abuses and usurpations. and unalienable rights of man.

”*9+ Yet today. our emphasis on a meritocracy and a market system and a rule of law has enabled generation after generation to live better than their parents did. political leaders in the United States have chosen to intervene more directly in the economy and impose heavy regulations that put American businesses at a competitive disadvantage. accessed 6-30-13. as the annual Heritage Foundation/Wall Street Journal Index of Economic Freedom documents.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Poverty Loss of economic freedom causes poverty. People in countries with more economic freedom were not only happier.. and regulation. is Vice President of Foreign and Defense Policy Studies at The Heritage Foundation. But it means much more than opening trade by reducing tariffs. For the most part.¶ – Warren Buffett¶ August 22.D. Without it. fees. “The Benefits of Economic Freedom. economic freedom falls..com/papers/berggren_review.. the value of the dollar in our pockets declines. 3 (Niclas Berggren. or restricts the fair use of our property. Matthew Spalding. Kenneth Simon Center for American Studies at The Heritage Foundation.. Heritage Foundation. 11 (Kim R. Ph. Economic freedom improves quality of life Berggren.” and that if all economic decisions require the approval of government. “Why Does Economic Freedom Matter?” http://www. the effect of economic free. diffusing and diversifying by gentle means the streams of Commerce. they are vulnerable to oppression. Fall 2003.dom on certain other variables has been studied. people are unable to improve the conditions under which they and their posterity will live." [8] In the end. 2008¶ America’s openness to trade has always fueled its economic expansion. oppression. Esposto and Zaleski (1999) find that the quality of . “all the world would gain by setting commerce at perfect liberty.[6]¶ As Thomas Jefferson wrote to John Adams in 1785. KB) What these presidents understood is that economic freedom matters.pdf. countries that increased economic freedom saw poverty levels fall almost twice as much as countries that lost freedom. accessed 7-1-13.org/research/reports/2011/04/why-does-economic-freedom-matter. especially by the state.heritage. wealth. The correlation between economic freedom and prosperity is stunningly high.freetheworld. then “we should really be controlled in everything. it cheapens our labor. Holmes. as more and more nations have decided to follow that lead. is Director of the B.¶ [The] genius of the American economy. and equality. KB) In addition to the variables growth.¶ The loss of economic freedom hits the poor especially hard. Ph.” http://www. and other impacts Holmes and Spalding. Free the World. Over the past decade.”*7+Economic freedom—free markets at home and free trade in the world—is essential to human liberty. which would otherwise help bring prices down. Tariffs make the cost of imports higher and have a dampening effect on competition. and with it our ability to buy and do what we want. If government imposes additional costs on consumers and businesses through higher taxes. Associate Professor of Economics at the Research Institute of Industrial Economics. with more freedom translating to greater per capita income.D. the United States led the way in expanding free trade worldwide. Over the past 50 years. If economic policies cause prices to rise. but more prosperous. We only need recall the human toll of slavery and Soviet Communism to understand what Friedrich Hayek meant when he noted that “to be controlled in our economic pursuits means to be always controlled. liberty is whole and universal: The world will not be free politically if it is not free economically. Worse. we have taken George Washington’s advice to “hold an equal and impartial hand .

Governments that choose policies that increase economic freedom are placing their societies on the pathway to more meaningful and productive work. “Defining Economic Freedom. accessed 7-1-13. KB) Free markets are conducive to growth. both if one compares nations and if one looks at the same countries over time. and less regulation of domestic and international trade and of capital transactions are important. freedom to establish new businesses. Fall 2003. is a vital element of human dignity. economic freedom is also about a multidimensional process of achieving economic progress. economic freedom is valuable as an end itself.freetheworld.” http://www.opment Index. Associate Professor of Economics at the Research Institute of Industrial Economics. from whatever level. “The Benefits of Economic Freedom. more flexible contract laws. improvements in economic freedom. have been shown to enhance economic dynamism and social progress. Center for International Trade and Economics. Trade leads to economic freedom which leads to economic growth and income equality Berggren. economic freedom is the key to achieving the broad-based economic dynamism that ensures lasting growth and increased prosperity for society as a whole. lasting growth and prosperity. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation. KB) Economic freedom. with its 10 freedoms interacting with and complementing each other. accessed 6-30-13. In addition. For example. Equally important. Anthony Kim is a Policy Analyst in Heritage's Center for International Trade and Economics. rank higher on the United Nations Human Devel. 3 (Niclas Berggren. Economic freedom leads to human dignity. as measured in the EFI.¶ In other words. enhanced and secured by the rule of law.org/index/book/chapter-7.dom is increased. Free the World. growth- . regulatory efficiency. and open markets. limited government. schooling and hospitals are run as government monopolies in many countries and are in most cases heavily regulated. which is why measures such as privatization. 12 (Ambassador Terry Miller is the Director of the Center for International Trade and Economics (CITE) and the Mark A.heritage.pdf. This government activity reduces the scope for a dynamic. providing individuals the ability to plan and direct their lives in ways that maximize their happiness as they see fit . But equally important is that.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade life.¶ Nineteen years of data in the Index of Economic Freedom have documented the clear association between higher levels of economic freedom and greater levels of overall prosperity. and better standards of living for all.” http://www. higher incomes. and social and economic progress Miller and Kim. increases as economic free. in terms of literacy and life expectancy.com/papers/berggren_review. Norton (1998a) shows that countries with stronger protection of private property. Goldsmith (1997) uses the EFI and shows that developing countries that protect economic rights have a higher level of human well-being. freer pricing.

more long-term increases in the free. This factor is particularly problematic in many devel. In recent years.nomic development.¶ 4.cially in developing nations.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade enhancing market process in which each new business and each new way of doing something can be regarded as an experiment in trying to achieve better consumer satisfaction than existing alternatives.oping nations. particularly above certain threshold levels. In order to benefit income equality. on growth is negative in the medium and long term (Khan and Senhadji 2000). labor markets are heavily regulated in many countries. 3. An impartial and strong judicial system that protects private-property rights and upholds contracts and agreements is central for a strong eco. in part as a result of greater central. espe.¶ 5.dom to trade and carry out financial transactions seem especially useful. Furthermore.ticularly harmful in this regard.tracts. The scope for reforms is substantial. Monetary policy and growth seem to be only weakly connected. but the more detailed studies indicate that the effect of inflation. with heavily curtailed possibilities to enter into voluntary employment con. . Protectionism against the developing world is par. inflation rates in most developed nations have come down.bank independence.

“Defining Economic Freedom. the higher growth rates spurred by advances in economic freedom tend to inspire a virtuous cycle of openness and resilience.” http://www. It empowers people to exercise greater control of their daily lives. economic freedom ultimately nurtures political reform as well. The result is a sort of compounding that has created in the countries with the highest levels of economic freedom a level of prosperity and human well-being unmatched in human history.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Democracy Economic freedom leads to multiple benefits including political reform. accessed 6-30-13. thereby encouraging the creation of more pluralistic societies. effective and democratic governance. KB) The broad consensus supported by volumes of evidence-based research is that vibrant and lasting economic growth is achievable only when governments adopt economic policies that increase individual choice and opportunity.org/index/book/chapter-7. Economic freedom makes it possible for individuals to gain the economic resources necessary to challenge entrenched interests or compete for political power. Center for International Trade and Economics. empowering and encouraging entrepreneurship.¶ Greater economic freedom also provides more fertile ground for effective and democratic governance. Kolokotrones Fellow in Economic Freedom at The Heritage Foundation. Anthony Kim is a Policy Analyst in Heritage's Center for International Trade and Economics. and increase in individual choice Miller and Kim. 12 (Ambassador Terry Miller is the Director of the Center for International Trade and Economics (CITE) and the Mark A. triggering even further improvements in economic freedom.¶ In addition to the great levels of prosperity and human development induced by high levels of economic freedom. . By increasing options.heritage.

they are also contributing to the economic gain of others. as now.¶ As a sovereign nation. fueling economic growth and prosperity. Heritage Foundation. by protecting the exertions of talent and industry. Holmes.org/research/reports/2011/04/why-does-economic-freedom-matter. Ph. there always have been stronger voices who knew that such policies would wind up strangling the creativity. “No nation was ever ruined by trade. accessed 6-30-13. the responsibility for ensuring Americans can market the fruits of their labor abroad rests with the federal government.D.. Holmes. taxes. Matthew Spalding.heritage. is Director of the B. “Why Does Economic Freedom Matter?” http://www. is Vice President of Foreign and Defense Policy Studies at The Heritage Foundation. The Founders deeply resented the King of England “cutting off our trade with all parts of the World. and access to markets that people need to flourish and prosper and economies need to grow and remain strong.. and as Benjamin Franklin wrote in the Principles of Trade in 1774.¶ The challenge for America’s leaders has always been to keep government from getting too burdensome and too involved in economic markets.”*5+ Commerce was vital to their way of life. . some have wanted government to impose regulations. KB) Under the Constitution the federal government’s two most important functions concern the nation’s security (to “provide for the common defence”) and the national economy (the power to regulate interstate commerce. is Director of the B.D. Not only does the Constitution limit the reach of the federal government into the everyday lives of Americans. tax. accessed 6-30-13. 11 (Kim R. productivity. thankfully. 11 (Kim R. and set the national currency). competition.”*4+ By empowering individuals to pursue their own gain in a market in which goods and services are traded at fair prices and property rights and contracts are enforced..Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic Growth Free trade leads to economic freedom which in turn creates economic growth Holmes and Spalding. Kenneth Simon Center for American Studies at The Heritage Foundation. To this day. this freedom to trade unleashed opportunities for specialization and exchange. Ph. but in abolishing restrictions on trade among the states[2+ it created the world’s first modern free trade area. Matthew Spalding. tariffs.” Empirics prove that economic freedom leads to substantial economic growth Holmes and Spalding.” Alexander Hamilton argued. Heritage Foundation. Ph.heritage. As the young nation expanded its borders across the continent and its population grew. That might have made sense at the start of the country. the United States upholds a dynamic social order in which individuals are free to rise—and to fall—on the road to success.[3]¶ History continues to prove the wisdom of the Founders’ belief in the unity of both political and economic freedom. “tends more powerfully than any other cause to augment the mass of national wealth. “True liberty..org/research/reports/2011/04/why-does-economic-freedom-matter. Kenneth Simon Center for American Studies at The Heritage Foundation. Ph.D. is Vice President of Foreign and Defense Policy Studies at The Heritage Foundation.D. Yet. “Why Does Economic Freedom Matter?” http://www. KB) Then. or other interventions to protect and advantage certain activities and to minimize economic risk.

who proposed a North American free trade area and signed a free trade agreement with Canada.¶ Andrew Jackson resolved trade disputes with France. . and Ronald Reagan. Siam. He also signed trade agreements with Russia. His vision became reality when Bill Clinton signed the North American Free Trade Agreement in 1993—creating the world’s largest free trade area and increasing trade in the hemisphere from $297 billion in 1993 to almost $1 trillion in 2007. Portugal. and Turkey. Spain. Overall. who reduced tariffs. and Spain to America’s advantage. He signed a trade agreement with Great Britain that reopened trade with the British West Indies. and the first trade agreement with an Asian nation. Denmark. Americans saw a 75 percent growth in exporting and 250 percent growth in imports. under Jackson.¶ The free trade tradition was carried on by presidents like James Polk. most American leaders have agreed with the Founders that the greatest gain for each comes from free markets and free trade for all.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade That’s why throughout our history.

smaller firms are about twice as likely to file “high-impact” patents. Mercatus Center at George Mason University.heritage. older. and faster capital growth. 34¶ For these reasons. and a lack of innovation. 28¶ Empirical research supports this claim. For example. encumbered by larger internal bureaucracies. Looking at the factors that correlate with faster . and less profitable than non-lobbyers” and concluded that protection “appears to reward less innovative firms.” 29¶ International evidence supports the claim that firms that are more likely to ask for privilege tend to be less profitable. “The Pathology of Privilege: The Economic Consequences of Government Favoritism”. Mercatus Center at George Mason University. 33 And compared with larger firms. those that are politically connected exhibit significantly worse financial performance than their nonconnected peers at the time of and following the bailout. In a survey of 450 politically connected firms from 35 countries. Amar Bhidé of the Columbia Business School. accessed 6-30-13. After controlling for other factors. 36 They looked at the lists of top firms in 44 countries in 1975 and again in 1996.” 30 Economic freedom allows innovation – prevents economic collapse Mitchell. and Bernard Yeung recently examined the link between turnover among nations’ top firms and economic growth. http://www.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Innovation Lack of economic freedom leads to a lack of innovation Mitchell. KB) As protected firms become less innovative. economists Stefanie Lenway. “The Pathology of Privilege: The Economic Consequences of Government Favoritism”.4 percent of those companies on the Fortune 500 list in 1955 were still there in 2010. 12 (Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University. This is because. has argued that big firms. and John McConnell concluded that “among bailed-out firms. new firms constantly arise to challenge older.org/index/book/chapter-4. greater productivity growth.” In a healthy economy.¶ To test Schumpeter’s theory. and Bernard Yeung studied a decade’s worth of data from 130 steel firms to look for differences between firms that lobby heavily and those that do not. are virtually incapable of capitalizing on radical ideas. Fortune 500 companies is illustrative: Only 13.S. firms have less of an incentive to invest in productivity-enhancing research and development. can disadvantage an entire society. Kathy Fogel. 12 (Matthew Mitchell is a senior research fellow at the Mercatus Center at George Mason University. turnover among a nation’s largest firms is a sign of vitality . Randall Morck. 32 Indeed. privileged firms are less likely to innovate. a country’s overall economic growth may suffer . They found that the most active lobbyers “tend to be larger. in turn. 31¶ One of the leading experts on entrepreneurship. For example.heritage. Ronald Masulis. The list of U. economist Chun-Lei Yang has shown that as rent-seeking activities grow more prevalent. KB) Privilege can also have a profoundly negative effect on innovation.org/index/book/chapter-4. Randall Morck. Mara Faccio. less diversified. accessed 6-30-13. economic growth thrives on “creative destruction. they found that those nations with more turnover among their top firms tended to experience faster per capita economic growth. Thus. research finds that new firms are more likely than existing firms to license novel technology. http://www. as Schumpeter emphasized nearly a century ago. 35 But not all nations experience the same sort of “churn” among their top firms. less-innovative behemoths.

KB) If we have theoretical reasons to expect a positive relationship between economic freedom and economic growth. Free the World. Fall 2003. Empirics prove – trade and economic freedom cause innovation and prosperity Berggren. accessed 7-1-13. are the countries that have really not done too well. does empirical evidence confirm this effect? Jagdish Bhagwati thinks it does:¶ it is not difficult to assert that economic freedom is likely to have a favorable effect on economic prosperity. .freetheworld.” http://www. 3 (Niclas Berggren.com/papers/berggren_review.” 37 Thus. less bank-dependence. for the simple reason that the last fifty years of international experience more or less confirms the fact that wherever governments used markets more and engaged in more open policies in foreign trade and investment. By contrast. common law. investment and innovation. their countries have tended to prosper. “The Benefits of Economic Freedom. those countries that turned inward and had extensive regulations of all kinds on domestic economic decisionmaking in production.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade firm turnover.pdf. and greater openness [to trade]. Associate Professor of Economics at the Research Institute of Industrial Economics. turnover is more likely when there is economic freedom. they found that “big business turnover also correlates with smaller government. indeed in more economic freedom of different kinds. stronger shareholder rights.

Free the World. such as Canada.” Lack of economic freedom leads to economic collapse – multiple warrants Berggren. protected by government institutions dedicated to transparent rule of law. Since Hugo Chávez took power in Venezuela in 1999. not to mention most of the Middle East and many countries in Africa. in Milton Friedman’s words. from oil. “Property Rights Can Solve the ‘Resource Curse. decentralization of power. privatization of ownership of mineral resources. The 17th-century English philosopher and Father of the Enlightenment John Locke famously observed that the most basic form of property. accessed 7-1-13. The exchange of goods and services throughout communities benefits all parties to a transaction if all of the participants in the market are. Recent efforts by development assistance experts to promote “conditional cash transfers”2 as a solution are merely attempts to push another statist approach in disguise. “The Benefits of Economic Freedom. paradoxical. The key is to create a government large enough to guarantee property rights but small enough not to threaten them. Nigeria.¶ Other resource-rich nations. and the murder rate in Caracas is one of the highest in the world.” so costly in terms of both economic and human development. and protection of all privately held property. and its poverty rate has increased from 36 percent to nearly 70 percent.and gas-rich Russia to soybean.¶ The cure for this economic and political disease is the adoption of the core principles of economic freedom: limited government.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Resources Economic freedom key to stop the resource curse Roberts.org/index/book/chapter-5. How? They did it by adopting a strong system of private-property protections within a market-based democracy. This “resource curse. Center for International Trade and Economics at The Heritage Foundation. accessed 6-30-13.heritage. yet its economy has shrunk (in terms of purchasing power parity).¶ Victims of this curse can be found all over the world.’” http://www.pdf.com/papers/berggren_review. there are shortages of basic staples.and beef-laden Argentina.1 yet inflation in Venezuela has never been higher. has received about $600 billion in oil revenue since gaining independence in 1960. for instance. and overall excessive interference in the economy by those who consistently favor biggovernment solutions to every problem. heavy and job-killing taxation. is the fruit of one’s labor. close to $100 billion in oil export revenues has flowed into the government’s coffers every year. 3 (Niclas Berggren. Fall 2003. “free to choose. KB) . 12 (James M Roberts is Research Fellow For Economic Freedom and Growth at the Center for International Trade and Economics at The Heritage Foundation. Chile.3 Locke’s breakthrough revelation in 1690 in his Second Treatise was that those fruits themselves are the property of each person.freetheworld.¶ The “resource curse” results when massive streams of revenues from resources are forced through the economic choke point of a statist government with its multiple opportunities for corruption by government officials. and Norway. after one’s own body. have avoided this fate. and tragic tradition of resource-rich developing countries suffering from prolonged economic stagnation. KB) There is a long.” http://www. has its roots in the failed statist economic policies of the past. Associate Professor of Economics at the Research Institute of Industrial Economics.

Schleifer. chap.tions per se. 2) and in which competition between different actors occurs because regu. North (1990) points out. and Vishny 1991). for several reasons:¶ they promote a high return on productive efforts through low taxation. they facilitate predictable and rational decision making through a low and stable inflation rate.¶ Although certain types of institutional change can be expected to have distinctly positive growth effects by introducing the kind of incentives just mentioned. sustained high growth rates imply ultimately great wealth. Very high and stable economic freedom. and the protection of private property. they enable talent to be allocated to where it generates the highest value (as argued in Murphy. Fur.thermore.tion and grow. established insti. even though an increase in economic freedom from a low level might exert a much more distinct influence on the growth rate for a certain period. we presume. allows a dynamic economy to func. can be inefficient or efficient.preneurs. an independent legal system. institu.tutions set the economic incentives and influence what economic actors do. they foster a dynamic. To the extent that the institutions stimulate actions that contribute to the production of more valuable output. which.7 Institutions that guarantee economic freedom plausibly have the capacity to provide the growth-enhancing kind of incentives. as Douglass C. and so in the long term the economic freedom that increases growth can also be expected to increase accumulated wealth. in place over time. . financiers.lations and government enterprises are few. experimentally organized economy in which a large amount of business trial and error can take place (Johansson 2001. In any given period. industrialists. they contribute to economic growth. and others) face are determined in large part by the institutions in place. and they promote the flow of trade and capital investment to where preference satisfaction and returns are the highest.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade That economic freedom is an important factor accounting for economic growth is probable on purely theoretical grounds. can exert an influence not only on the level of wealth but also on growth rates. all else being equal. innovators. The incentives that economic actors (entre.

Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic Freedom Bad .

This will also require physical rationing of many critical resources on a per capita basis for every person on the planet. “Ecosocialism or Collapse.¶ Human survival will thus require a profound rethinking of our most fundamental ideas –bourgeois ideas — of economic freedom. in effect. it will also become apparent that we have to put in place a planned economy that will meet our needs and those of future generations as well as the other species with whom we share the planet. “Tragedy of the Commons. in a world of fast-diminishing resources. Climate and Capitalism. This will require drastically cutting back many lines of production. is overrun with desperate environmental refugees from the South. That means that to survive.” if not their very being and essence.com/2007/06/11/ecosocialism-or-collapse/. KB) First.blogspot. In the 1970s.” http://centerforeconomicliberty. Professor of Human Ecology at the University of California. Center for Economic Liberty. They merely restricted the commons to individual nations. Institute for Policy Research and Development. equity can only be achieved by imposing massive cutbacks in the advanced countries combined with a program of rational planned growth to develop the Third World. The fish were. a commons. closing down others entirely. accessed 7-2-13. For too long. 6/11/7. with insatiable consumption — unlimited freedom of ”choice” in what to buy. and creating socially and environmentally useful jobs for workers made redundant by this transition. humanity will have to impose drastic fixed limits on development. have come to identify their notion of ”freedom. the freedom to consume. we should be on the lookout for some sort of commons. resource consumption. nations began to assert their sole right to fish out to two hundred miles from shore (instead of the traditional three miles). 12 (Garrett Hardin. 7 (Richard A. Given existing global inequities and the fact that the crisis we face is overwhelmingly caused by overconsumption in the industrialized North.com/2012/01/tragedy-of-commons-by-garretthardin. economic collapse. Once we as a society finally admit the ”inconvenient truth” that we have no choice but to drastically cut production and severely reduce consumer choice. many Americans. and the freedom to pollute.S. 16 models of SUVs and endless choices in ”consumer electronics” will all have dramatically less value when Bloomingdales is under water.” http://climateandcapitalism. Each nation still has the problem of allocating fishing rights among its own people on a . and conflict – empirics prove Hardin. accessed 7-1-13. KB) Whenever a distribution system malfunctions. with the aim of stabilizing at zero growth on average. and the U. Smith. Economic freedom causes environmental destruction.html. But these exclusive rights did not eliminate the problem of the commons. in particular. malarial mosquitoes blanket Long Island beaches.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade List Economic freedom cause overconsumption which will lead to multiple impacts including environmental collapse and extinction Smith. Fish populations in the oceans have been decimated because people have interpreted the “freedom of the seas” to include an unlimited right to fish them. Florida disappears beneath the waves. a sustainable global economy can only be based on near-zero economic growth on average. But 50 styles of blue jeans.

as an examination of Hutterite communities reveals. The result is congestion. the distribution system can be managed by shame. Such cases are spoken of as “managed commons. depending on the quality of the management. . The old Roman warning must be kept constantly in mind: Quis custodiet ipsos custodes? (Who shall watch the watchers themselves?)¶ Under special circumstances even an unmanaged commons may work well. But as the human population grew larger. Both systems result in a vast overinvestment in fishing boats and equipment as individual fishermen compete to catch fish quickly. But because governments own roads that they finance with tax dollars. they often estimate the maximum sustainable yield and then restrict fishing either to a fixed number of days or to a fixed aggregate catch. areas remain in which reform is difficult. it is treated as a common dump into which everyone may discharge wastes. As with all things human. to each according to his needs. however.¶ If any group could make a commonistic system work. Instead. As the size of a colony approaches 150. owners would charge tolls and people would take the toll into account in deciding whether to use them. socialism may be good or bad.” which is the logical equivalent of socialism.” (They give no credit to Marx. hunting and trapping had to be managed. Thus. The government makes roads into a commons. engineers speak of a “scale effect. there is no guarantee of permanent excellence. But numbers are the nemesis.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade noncommonized basis. In Madison’s terms. and the erosion of the Earth’s protective ozone layer. above that approximate number. Early frontiersmen in the American colonies killed as much game as they wanted without endangering the supply. The number of people included in the decision unit is crucial. The oceans are also treated as a common dump. so that an owner could sue those who encroach on his fish. No one owns the Earth’s atmosphere. The experience of Hutterite communities indicates that below 150 people. nonangelic members then corrupt the angelic. But appearances are deceiving. Whenever size alters the properties of a system.) At first glance Hutterite colonies appear to be truly unmanaged commons. charging higher prices during times of peak demand and lower prices at other times. combined with faltering federal surveillance of the S&Ls. Yet continuing to defend the freedom to pollute will ultimately lead to ruin for all. Owners of private roads would probably also engage in what is called peak-load pricing. S&Ls had the incentive to make overly risky investments. shame loses its effectiveness. and depositors did not have to care because they did not bear the cost. the ratio of supply to demand is critical. If each government allowed ownership of fish within a given area. But governments do not do that. This. limits the workability of commonistic systems. The losses were “commonized” among the nation’s taxpayers. Nations are just beginning to evolve controls to limit this damage. These devoutly religious people in the northwestern United States live by Marx’s formula: “From each according to his ability. Industries and even nations are apt to regard the cleansing of industrial discharges as prohibitively expensive.¶ Congestion on public roads that do not charge tolls is another example of a government-created tragedy of the commons. owners would have an incentive to refrain from overfishing. they normally do not charge tolls.¶ The tragedy of the commons also arose in the savings and loan (S&L) crisis. individual Hutterites begin to undercontribute from their abilities and overdemand for their needs. the multiplication of which kept pace with their needs. Among the unwanted consequences of this behavior are acid rain.” A scale effect.¶ Even when the shortcomings of the commons are understood. The principal requirement is that there be no scarcity of goods. with serious consequences to the federal budget (see savings and loan crisis). an earnest religious community like the Hutterites should be able to. The federal government created this tragedy by forming the Federal Savings and Loan Insurance Corporation (FSLIC).¶ The scale of the commons (the number of people using it) also is important. based on human psychology. If roads were privately owned. Therefore.¶ Some of the common pastures of old England were protected from ruin by the tradition of stinting—limiting each herdsman to a fixed number of animals (not necessarily the same for all). the government made the taxpayers’ money into a commons that S&Ls and their depositors could exploit. Viewed this way. the greenhouse effect. In effect. led to widespread failures. The FSLIC relieved S&L depositors of worry about their money by guaranteeing that it would use taxpayers’ money to repay them if an S&L went broke. similar language can be found several places in the Bible.

and encourage export policies that rely on single crops desired by rich countries and the depletion of natural resources of less-developed countries? From this catalog of errors. environmental and economic collapse Gorga. distributive justice and frugality naturally spring forth for the construction of a sane economic policy. “Frugality: Rebalancing Material and Spiritual Values in Economic Life.freepatentsonline. 9/22/8. threaten ecological disaster. discourage import substitution.html. accessed 7-2-13. KB) The position of mainstream economics in relation to international trade and globalization appears to be even less tenable because it contravenes a basic assumption of its own theory: Capital is not supposed to move freely between nations! These arguments lead to a definite condemnation of current national and international policies concerning growth and distribution of income: How else does one evaluate policies that favor debt.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic freedom leads to overconsumption.” http://www. President of the Somist Institute. 8 (Carmine Gorga. .com/article/Journal-Markets-Morality/211236205.

and Stiglitz (2000)). in particular those aspects which favor competition to¶ foreign and private banks. KB) In this study we find that the set of policies that favor liberalization in credit markets (regulatory¶ quality) are negatively correlated with countries' resilience to the recent recession as measured by¶ output growth in 2008 and 2009. Our paper does not identify these mechanisms. for example. and Lucrezia Reichlin. and Stiglitz¶ (1997) and Easterly. Michele Lenza. Our result points to a specific¶ direction for future research. 7/27/10. various indicators of financial depth as¶ well as labor market regulations. It is therefore important to¶ understand what are the mechanisms which make deregulated markets more vulnerable. but much more has to be done to understand it.¶ In the last twenty years we have seen the adoption of policies favoring financial markets liberalization¶ and financial markets development. credit market regulation emerges as one of the five more sig-¶ nificant (with a negative sign) explanatory variable for the decline in output growth in 2008 and¶ 2009.¶ The literature has suggested mechanisms through which more deregulated markets are more prone¶ to risk taking behavior (see. from income per capita to¶ variables capturing the depth of the financial market. may indeed capture \unobserved" risk taking leading to macroeconomic¶ 17vulnerability.oecd. banking competition. accessed 7-1-13.Organization for Economic Co-operation and Development. have favored increasing financial market liberalization. while development has helped countries¶ mitigating output volatility.¶ but the analysis suggests that liberalization. Our paper¶ has uncovered a fact.org/eco/growth/46418753. the current account but not other¶ openness indicators. variables which are estimated to be negatively correlated¶ with resilience are net interest margins and overhead costs in the banking sector. aiming at understanding the link between financial liberalization and¶ vulnerability to cyclical shocks. when considering a wide¶ range of potential predictors jointly.¶ Cross country regressions are too limited as a tool to allow us to go deeper in this analysis. liquidity and financial¶ and macroeconomic imbalances and several robustness tests. the reverse has been true for liberalization. Murdock. Hellmann. 10 (Domenico Giannone. in the last¶ two decades. This is important for the evaluation of policies which.¶ Variables that are positively linked to resilience are income level. Professor of Economics at Solvay Brussels School of Economics and Management.” http://www.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Economic Collapse Economic freedom bad – studies show that it leads to economic collapse Giannone et al. Islam. “Market freedom and the global recession.¶ Beside credit market regulatory quality. Our results suggest that. banks' claims as percentage of deposits.¶ The negative correlation survives the inclusion of a wide range of controls. Moreover.pdf. . Diaz-Alejandro (1985).

no Government would be necessary” (Federalist.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Unsustainable Economic freedom encourages self-interest which inevitably leads to collapse – tragedy of the commons proves Hardin. They try to get their share out of the commons before competitors do. That is. Inevitability justifies the epithet “tragedy. “Should I add another animal to my herd?” Because the herdsman owned his animals. And reasoning in the same way. Center for Economic Liberty. 51). At the point when the carrying capacity of the commons was fully reached.¶ The spoilage process comes in two stages. and cropped so differently from the adjoining inclosures?”¶ Lloyd’s answer assumed that each human exploiter of the common was guided by self-interest. .” http://centerforeconomicliberty. looking at the recurring devastation of common (i. “Tragedy of the Commons. If all decision makers were unselfish and idealistic calculators. Then. every workable distribution system must meet the challenge of human self-interest. As James Madison said in 1788. so would all the other herdsmen. In 1832 William Forster Lloyd.¶ Even when herdsmen understand the long-run consequences of their actions. KB) The rational explanation for such ruin was given more than 170 years ago. they generally are powerless to prevent such damage without some coercive means of controlling the actions of each individual. In other words.” which I introduced in 1968. Because the privatized gain would exceed his share of the commonized loss. a distribution governed by the rule “to each according to his needs” might work. Ultimately. But the loss incurred by overloading the pasture would be “commonized” among all the herdsmen. some of them renounce their angelic behavior.com/2012/01/tragedy-of-commons-by-garretthardin.e.. the gain of so doing would come solely to him. the non-angel gains from his “competitive advantage” (pursuing his own interest at the expense of others) over the angels. accessed 7-1-13. not privately owned) pastures in England. asked: “Why are the cattle on a common so puny and stunted? Why is the common itself so bare-worn. asking them to let the long-term effects govern their actions. Idealists may appeal to individuals caught in such a system. a herdsman might ask himself. a selfseeking herdsman would add another animal to his herd. “If men were angels. a single nonangel in the commons spoils the environment for all. But such is not our world.blogspot. Professor of Human Ecology at the University of California. no. But in a world in which all resources are limited. a political economist at Oxford University. the common property would be ruined. An unmanaged commons in a world of limited material wealth and unlimited desires inevitably ends in ruin. 2012 (Garrett Hardin. But each individual must first survive in the short run. if all men were angels. as the once noble angels realize that they are losing out. And another.html. First.

etc. and the destruction of the institutions that keep the social order from completely collapsing Bourdieu. but also and above all two major trends. and Philosopher. despite the growing volume of the endangered population. the market. schooled in higher mathematics and bungee jumping. publishing.com/1998/12/08bourdieu. Sociologist. repository of all of the universal values associated with the idea of the public realm. 98 (Pierre Bourdieu. accessed 7-2-13. December 1998. at least when it comes from the state. loss of culture. and all the work of all of the categories of social workers.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade VTL Economic freedom leads to poverty. as well as all the forms of social solidarity. is the continuity or survival of those very institutions and representatives of the old order that is in the process of being dismantled. Mondediplo. First is the destruction of all the collective institutions capable of counteracting the effects of the infernal machine. through the intrusive imposition of commercial values. of that sort of moral Darwinism that. The obstacles encountered on the way to realising the new order of the lone. familial or otherwise. But in reality. the extraordinary growth in income differences. “Utopia of Endless Exploitation: The Essence of Neoliberalism.¶ Can it be expected that the extraordinary mass of suffering produced by this sort of political-economic regime will one day serve as the starting point of a movement capable of stopping the race to the abyss? Indeed.” http://mondediplo. Anthropologist. . is discredited in advance and thus condemned to efface itself for the benefit of a pure and anonymous mechanism. primarily those of the state. Second is the imposition everywhere. with the cult of the winner. we are faced here with an extraordinary paradox. whose nature as a site where interests are exercised is forgotten. with the immediately visible effects of the implementation of the great neoliberal utopia: not only the poverty of an increasingly large segment of the most economically advanced societies. such as film. in the upper spheres of the economy and the state as at the heart of corporations. but free individual are held today to be imputable to rigidities and vestiges. institutes the struggle of all against all and cynicism as the norm of all action and behaviour. the progressive disappearance of autonomous universes of cultural production. KB) And yet the world is there. All direct and conscious intervention of whatever kind. what keeps the social order from dissolving into chaos.

they have enough specific interests in the field of economic science to contribute decisively to the production and reproduction of belief in the neoliberal utopia. and Philosopher. and the reduction of public and social expenses. the general privatisation of public services. in this regard. but also among those. it has much in common. bookish. it tends to give reality to the ultra-logical utopia (ultra-logical like certain forms of insanity) to which they consecrate their lives. at the risk of a few failures. which has been turned into a model of rationality. “Utopia of Endless Exploitation: The Essence of Neoliberalism. They want independent central banks. the owners and managers of large corporations. they are particularly inclined to confuse the things of logic with the logic of things. . such as high-level government officials and politicians.” http://mondediplo. And they preach the subordination of nation-states to the requirements of economic freedom for the masters of the economy. These economists trust models that they almost never have occasion to submit to the test of experimental verification and are led to look down upon the results of the other historical sciences. Sociologist. whose necessity imposes itself even upon the rulers. such as financiers. beginning with the labour market. with which. whose true necessity and profound complexity they are often incapable of understanding. KB) Thus we see how the neoliberal utopia tends to embody itself in the reality of a kind of infernal machine.¶ Economists may not necessarily share the economic and social interests of the true believers and may have a variety of individual psychic states regarding the economic and social effects of the utopia which they cloak with mathematical reason. Like the Marxism of an earlier time. and theoretical. the prohibition of deficits and inflation. in which they do not recognise the purity and crystalline transparency of their mathematical games. imputable to what they sometimes call "speculative bubbles". Anthropologist.not only among those who live off it. 98 (Pierre Bourdieu. For they sanctify the power of markets in the name of economic efficiency. Nevertheless. which is most frequently purely abstract. December 1998. this utopia evokes powerful belief the free trade faith . Mondediplo. Separated from the realities of the economic and social world by their existence and above all by their intellectual formation. etc. it cannot displease them because.Gonzaga Debate Institute 2013 Pointer/Lundeen/Spraker Free Trade Prefer Our Evidence Their cards are false – the authors have specific interests in economic freedom which makes them inclined to confuse studies Bourdieu. Even if some of its consequences horrify them (they can join the socialist party and give learned counsel to its representatives in the power structure). They participate and collaborate in a formidable economic and social change. which requires the elimination of administrative or political barriers capable of inconveniencing the owners of capital in their individual quest for the maximisation of individual profit.. accessed 7-2-13. who derive their justification for existing from it. with the suppression of any regulation of any market.com/1998/12/08bourdieu.