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The controversy over free trade: the gap between economists and the general public

  • Cletus C. Coughlin

Despite economists’ nearly universal support of free trade, the general public in the United States has serious reservations about it. In this article, Cletus C. Coughlin examines the reasons for this difference of opinion and the primary suggestions for bridging this gap.> Economists stress that free trade allows and, in fact, forces a nation to maximize the (net) value of the goods and services produced within its borders. Similarly, free trade allows consumers to maximize the net benefits from the goods and services that they purchase and consume. In addition, free trade improves a nation’s growth prospects. Despite these benefits, the general public remains skeptical about free trade policies. Some opposition is due to a lack of understanding about the reasons for and the impact of international trade. Additional opposition arises because the general public differs from economists in how they weigh the costs and benefits of free trade policies and which issues trade negotiations should encompass. Implementing free trade policies imposes costs upon those incurring either job losses or wage reductions. Relative to economists, some opponents of free trade tend to weigh these costs more heavily than the benefits. In addition, some oppose free trade because of concerns that free trade contributes to the abuse of workers throughout the world and to environmental degradation.> To increase political support and to facilitate trade negotiations, Coughlin explores three increasingly controversial suggestions: increased education, policies to reduce the cost to those harmed by trade liberalization, and expansion of the issues covered in trade negotiations. Clearly, no easy answer exists for generating political support for one of the few issues that most economists agree upon—a nation’s economic well-being is best served by free trade.

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Article provided by Federal Reserve Bank of St. Louis in its journal Review.

Volume (Year): (2002)
Issue (Month): Jan. ()
Pages: 1-22

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Handle: RePEc:fip:fedlrv:y:2002:i:jan.:p:1-22:n:v.84no.1
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