NCPA - National Center for Policy Analysis

Free Trade Agreements Deliver More Trade

June 17, 2011

After a hiatus in the 1990s, a number of free trade agreements (FTAs) have been enacted in the past decade.  The U.S. government entered into an FTA with Jordan in December 2001, and with Chile and Singapore in January 2004.  It signed agreements with Australia in January 2005, Morocco and Bahrain in January 2006, El Salvador in March 2006, Honduras and Nicaragua in April 2006, Guatemala in July 2006, the Dominican Republic in March 2007, Costa Rica and Oman in January 2009, and Peru in February 2009, says Daniel Griswold, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute.

  • Collectively, these countries accounted for $96.4 billion in U.S. goods exports in 2010 and $71.3 billion in imports.
  • If these 14 nations were considered a single economic unit, they would be America's third largest export market and our sixth largest source of imports.
  • An analysis of trade flows with each of these 14 countries reveals that, on the whole, these agreements have delivered on their central promise to promote more trade between the United States and its agreement partners.
  • Indeed, the agreements appear to boost manufacturing exports above the overall trend while having no discernable impact on manufacturing imports.

Judging by actual U.S. trade flows since their enactment, the 14 most recent FTAs give strong evidence that trade agreements deliver the predicted boost to trade with the partner countries, says Griswold.

Source: Daniel Griswold, "As Promised, Free Trade Agreements Deliver More Trade: Manufacturing Exports Receive an Extra Boost," Cato Institute, June 7, 2011.

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