Whenever trade is debated in Washington, the focus is almost exclusively on its impact on producers and jobs virtually never on the benefits of import competition for American consumers. This is a serious oversight, because consumers reap huge benefits from the freedom to buy goods and services from a global marketplace, says Daniel T. Griswold (Cato Institute).
Free trade and the enhanced competition it brings keep a lid on prices paid by consumers. According to a report by the U.S. Federal Reserve Bank of Dallas:
As a general rule, explains Griswold, consumers in countries relatively open to trade enjoy a far higher standard of living than those in countries closed to trade. Economists James Gwartney and Robert Lawson found:
According to another study by the United States International Trade Commission, the lower trade barriers achieved through past trade agreements, have added an extra $56 billion in income annually to the U.S. economy, further boosting the buying power of American consumers. Clearly, economic openness and freedom translate into higher incomes and levels of consumption, says Griswold.
Source: Daniel T. Griswold (Cato Institute) Free Trade is a Big Issue For Consumers, Consumers’ Research, Vol. 86 No. 10, October 2003.
For Federal Reserve study http://www.dallasfed.org/fed/annual/2002/ar02b.html
For Gwartney and Lawson study http://www.freetheworld.com/release.html
For more on Free Trade Agreements http://www.ncpa.org/iss/int/
FMF Policy Bulletin\9 December 2003
