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News Release
April 3, 2000
WTO is a “double blessing” for the U.S., benefiting consumers and
producers
New Cato study examines costs and benefits of the WTO on the domestic
economy
By encouraging trade liberalization, the World Trade Organization promotes more vigorous global competition among producers, leading to lower consumer prices, rising worker productivity and higher living standards, according to a new Trade Briefing Paper released today by the Cato Institute. In “WTO Report Card: America’s Economic Stake in Open Trade,” author Dan Griswold examines the impact of WTO membership on the U.S. economy and finds that “because of the WTO, Americans are not only better off materially; they’re also freer from the power of government to decide what they produce and consume.”
The paper, first in a series that will examine the costs and the benefits of the WTO to the United States and the world, analyzes economic trends to test the arguments of globalization’s biggest critics. Griswold, associate director of Cato’s Center for Trade Policy Studies, writes that the arguments of free trade critics like Pat Buchanan, Lori Wallach and Ross Perot are based on half-truths that “contradict the most obvious facts about the U.S. economy in the year 2000.” Findings include:
- The WTO has not made Americans poorer. “During the last five years
living standards have been rising for low- and high-income workers alike.
More than 80 percent of jobs created since 1993 are in occupations that
pay above the median wage.”
- The WTO has not eroded the U.S. manufacturing base. “Despite warnings
of ‘deindustrialization,’ manufacturing in America today is thriving.
Since 1992, the manufacturing output of the United States has risen
by 42 percent, all against a backdrop of record imports.”
- The WTO has not caused the “giant sucking sound” of an outward flow
of capital to low-wage countries. “The outward flow of investment to
China and Mexico has remained relatively small. In fact, 80 percent
of foreign direct investment by U.S. manufacturing firms was in other
high-wage countries.”
- The WTO does not have a significant effect on the U.S. trade deficit. “America’s trade deficit is the result, not of unfair trade barriers abroad, but of our continuing surplus of foreign investment.”
Griswold writes, “Membership in the WTO has been a double blessing for the United States. The liberalization of markets abroad has created export opportunities for U.S. companies, raising profits, employment and wages. Meanwhile, WTO membership exerts pressure on the U.S. government to keep our own market open to the global economy, which gives American families access to a wider range of affordable goods and services, thus raising the real value of our paychecks.”
"WTO Report
Card: America’s Economic Stake in Open Trade"
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