COPENHAGEN – No matter how much some US presidential candidates may deride free trade, it remains the backbone of the American economy. Without it, the country would become significantly poorer and its global influence would diminish significantly. So why has bashing free trade become a key theme in this year’s presidential race?
One of the clearest reasons for this is that economic anxiety is widespread in the United States, which is still reeling from the aftereffects of the 2008 financial crisis. Too many Americans are working fewer hours and earning less than they once did. They are tired of the status quo, and the presidential candidates are right to address their concerns.
But introducing protectionist measures is a quack cure that would solve nothing; on the contrary, it would only exacerbate the economy’s problems. Free trade is not a liability for the US economy; it is a necessity. The US has negotiated free-trade agreements with 20 countries. And though these countries represent only 10% of the rest of the world economy, in recent years they have purchased nearly half of all US exports.
Furthermore, free trade benefits working-class families and low-income groups. Surges in cheap imports have greatly increased US workers’ spending power. One study calculated that the American median-income earner would lose 29% of his or her purchasing power if the country were to be closed to trade; the poorest in the US would forfeit as much as 62% of their purchasing power.