Economists Actually Agree on This: The Wisdom of Free Trade (original) (raw)
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- April 24, 2015
If Congress were to take an exam in Economics 101, would it pass? We are about to find out.
The issue at hand is whether Congress will give President Obama “fast track” authority to negotiate a trade deal with our trading partners in the Pacific. The bill is favored by some congressional leaders of both parties, including Senator Orrin G. Hatch, the Republican chairman of the Finance Committee, Senator Ron Wyden, the committee’s ranking Democrat, and Representative Paul D. Ryan, the Republican chairman of the House Ways and Means Committee.
House and Senate committees approved versions of the legislation last week. But with influential lawmakers like Senator Elizabeth Warren, a Democrat, opposed to the measure, final congressional approval is far from certain.
Among economists, the issue is a no-brainer. Last month, I signed an open letter to John Boehner, Mitch McConnell, Nancy Pelosi and Harry Reid. I was joined by 13 other economists who have led the President’s Council of Economic Advisers, a post I held from 2003 to 2005. The group spanned every administration from Gerald Ford’s to Barack Obama’s.
We wrote, “International trade is fundamentally good for the U.S. economy, beneficial to American families over time, and consonant with our domestic priorities. That is why we support the renewal of Trade Promotion Authority (TPA) to make it possible for the United States to reach international agreements with our economic partners in Asia through the Trans-Pacific Partnership (TPP) and in Europe through the Trans-Atlantic Trade and Investment Partnership (TTIP).”
Economists are famous for disagreeing with one another, and indeed, seminars in economics departments are known for their vociferous debate. But economists reach near unanimity on some topics, including international trade.
The economic argument for free trade dates back to Adam Smith, the 18th-century author of “The Wealth of Nations” and the grandfather of modern economics. Smith recognized that the case for trading with other nations was no different from the case for trading with other individuals within a society.
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