![]() ![]() ![]() Their costs are minimal at $15 billion, but benefits run far beyond a trillion dollars. It entirely neglects how good trade is for the poorer half of the world. While this validates some political concerns, it misses the larger picture: rich countries gain $7 for every dollar of costs. But they suffer more than 90% of the costs. ![]() Because rich countries make up the larger part of the global economy, they gain 60% of the $11 trillion. The new model also shows who bears the costs, and why rich countries have cooled most on trade. Still, the significant surplus from freer trade provides a pot of money to do so, and leaves an enormous development opportunity to lift incomes and people out of poverty. The people who are hurt by free trade should be helped more by governments. Yet, the benefits to humanity turn out to be $11 trillion, making this an excellent deal for the world. This cost justifies the concern of populist politicians. The economic model shows that if we grow global trade by 5%, the present-day cost for all workers worldwide into the future would be $1 trillion. For every $1,000 of additional imports per worker, the loss of earnings and increased risk of unemployment add up to a reduction worth almost 1% of the worker's wage. The research finds that the 'cost' of free trade for each import-exposed worker (such as a car factory line worker in Detroit) varies with the amount of imports within their line of work. But the study also uncovers the advantages of more trade, in higher incomes and the consequent improvements to the world's poor, making it possible to weigh both the costs and benefits of freer trade. ![]()
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