NCPA - National Center for Policy Analysis

In Praise Of Free Trade

January 4, 2000

Free-trade advocates like to point out that in the past 10 years trade has done more to alleviate poverty than any well-intentioned law, regulation or social policy in history.

Consider the following:

  • In China and the rest of East Asia, more people rose out of poverty since 1990 than the entire current population of the U.S.
  • In the developing nations in the 1990s, per capita income grew at an average rate of 3.6 percent per year, double the 1.8 percent growth in the advanced economies -- with the U.S. averaging 2.7 percent annually.
  • This is a reversal of the situation in the 1980s, when per capita growth averaged 1.9 percent among developing countries -- while it proceeded at a 2.4 percent pace among advanced countries.
  • Experts caution, however, that freer trade is not wholly responsible for this good news -- slower population growth is an important secondary factor.

Yet a recent poll by the Pew Research Center found that 43 percent of Americans think the global economy will help the average citizen in years to come -- while 52 percent think it will hurt.

Source: Bob Norton, "Not So Fast: Anti-Trade / Pro-Poverty," Fortune, January 10, 2000.

 

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