Free-Trade Agreements: Steppingstones to a More Open World
- Topics:
- WTO
- Tags:
- Free Trade,
- Free-trade Agreement
- Source:
- Cato Institute
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Overview: Since securing trade promotion authority in 2002, the Bush administration has launched an aggressive campaign to negotiate bilateral and regional free trade agreements (FTAs). Free-trade agreements deviate from the multilateral principle of nondiscrimination, and they can divert trade from more efficient to less efficient but favored import producers. This paper infers that under the right conditions, FTAs can inject new competition into the domestic economy along with lowering the prices for consumers. It can also shift factors of production to uses that are more efficient while leveling the playing field for U.S. exporters. FTAs provide institutional competition to keep multilateral talks on track. If other members of the World Trade Organization become intransigent, the United States must have the option of pursuing agreements with a “coalition of the willing” in pursuit of trade liberalization. To maximize the benefits of free trade agreements, the administration should seek agreements with countries that can provide import competition in the domestic market and export opportunities abroad. Judged by those criteria, the FTAs proposed by the Bush administration deserve to be pursued.
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Format: PDF | Size: 102KB | Date: Jul 2003 | Pages: 16
