Chile Shows the Way on Trade

The longest and least uplifting chapter in my new Cato book Mad about Trade is Chapter 9, where I describe all the remaining duties and restrictions our government imposes on our freedom to trade with people in other countries. We are certainly not “the most open market in the world,” as a member of President Obama’s Cabinet asserted in China last week. In fact, by one measure we rank a lowly 28th.

After mentioning this fact in speeches lately, I’ve been asked more than once to name the markets that ARE the most open in the world. Here, according to the latest 2009 Economic Freedom of the World Report, are the top ten most open economies:

1. Hong Kong
2. Singapore
3. Chile
4. Ireland
5. Panama
6. Netherlands
7. United Arab Emirates
8. Slovak Republic
9. Hungary
10. Luxembourg

(The list is a bit different from the one I cite in the book, which was based on the 2008 EFW report.)

One of the most remarkable members on the list is Chile. Decades ago, it was one of the most closed, protectionist economies in Latin America. Today it is the most open. In fact, when you consider that Hong Kong is a special administrative region of China, and Singapore is a tiny city state, Chile is the most open full-sized country in the world. (I hope our free-trade friends in Singapore won’t take offense at that!)

It is no coincidence that Chile has become the economic star of Latin America.

Will our own president and Congress learn from Chile’s example?