GAO Finds that Trade Agreements Promote Trade

The Government Accountability Office (GAO) released a report today that found that four trade agreements implemented during the Bush administration “have largely accomplished the U.S. objectives of achieving better access to markets and strengthening trade rules, and have resulted in increased trade.”

That is a finding that will be controversial only to the most hardened opponents of trade liberalization.

The GAO examined trade agreements with Jordan, Chile, Singapore, and Morocco, all enacted since 2001. Here’s the nut graph from the report:

While varying in details, the FTAs have all eliminated import taxes, lowered obstacles to U.S. services such as banking, increased protection of U.S. intellectual property rights abroad, and strengthened rules to ensure government fairness and transparency. Overall merchandise trade between the United States and partner countries has substantially grown, with increases ranging from 42 percent to 259 percent. Services trade, foreign direct investment, and U.S. affiliate sales in the largest partners also rose.

No big news here. Trade agreements are supposed to promote more trade, and each one of these agreements has delivered on that central objective. They have delivered the “level playing field” between U.S. producers and those in the FTA countries that members of Congress are always demanding. And as we have  amply documented through the years, more liberalized trade delivers faster growth, more consumer choice, better jobs, and higher living standards.

Opponents of trade have attempted to thwart such a straight-forward agenda by demanding that trade agreements become vehicles for enforcing more stringent labor and environmental standards in the partner countries. On this front, the GAO found that “FTA negotiations spurred some labor reforms in each of the selected partners, according to U.S. and partner officials, but progress has been uneven and U.S. engagement minimal.”

Critics will interpret this as a failure, but it really shows the limitations of FTAs as a club for imposing our social standards on what are often less developed countries. After all, we are talking about internal regulations of sovereign countries. The real question is not whether every provision of these agreements has been fully enforced, but whether most people in the participating countries are better off than they would have been without the increased trade promoted by these agreements. As the GAO report confirms, the answer is a clear, “Yes.”

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