At the Cato Institute, director and global trade analyst Daniel Griswold writes that “the goal of US trade policy should not be to promote exports at the expense of imports, but to maximize the freedom of Americans to trade goods, service and assets in the global marketplace.”
Griswold writes on why exports are not the only stimulant for our economy, and why imports do not “subtract” from our GDP. He reminds us all what we first leaned in Economics 101: in calculating the balance of payments, that which flows out must flow back.
A common trap of protectionism is that trade barriers “restrict the healthy, circular flow of international trade in goods, services and assets”. The end result of protectionism is reduction of both imports and exports, thereby damaging domestic economies and weakening the market share for a country’s manufacturing sectors.
Read more in The Trade Balance Creed: Debunking the Belief that Imports and Trade Deficits Are a “Drag on Growth”, published April 11, 2011 by the Cato Institute. For more on Daniel Griswold, visit the Center for Trade Policy Studies.
If you’re in San Diego, note that Griswold will participate in an international trade symposium at California State University San Marcos on Tuesday, June 21. Register here.