Global Trade: An Analysis

Comparative Advantage

• The doctrine of comparative advantage suggests that trade benefits all nations when they specialize in what they do best.

Costs of Global Trade

• Considerations against benefits:
  • Worker exploitation and dangerous conditions
  • Restricting labor unions
  • Child labor
  • Environmental impacts (e.g., pollution, deforestation)
• Global trade rules are negotiated between nations, determining who benefits and who is harmed.

Trade Agreements and Their Impact

• North American Free Trade Act (NAFTA) & World Trade Organization (WTO):
  • Protect assets of U.S. corporations (e.g., intellectual property)
  • Allow U.S. companies to seek compensation for reduced profits due to foreign regulations
  • Benefit pharmaceutical companies with extended drug patents
  • Assist stock traders in moving capital
  • Protect big agriculture

Negative Consequences

• Millions of American job losses:
  • Between 2000 and 2017, 5.5 million manufacturing jobs were lost, partly due to imports, mainly from China.
• Trade deals benefit the wealthy and burden the less affluent.

Conclusions

• Global trade is neither inherently good nor bad.
• The structure of trade deals currently favors the wealthy, resulting in economic disparity.