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Free Trade Fact Sheet
Free trade is far more controversial in the political world than in
economic circles. Ever since economist David Ricardo proved it would
be a good idea for people in Canada to send us maple syrup in
exchange for jazz records, countries have traded jobs, goods, and
technology. Despite the abundance of trade and the benefits it
brings to the U.S. and its partners, free trade is a contentious
subject. Journalists often complain about the increasing trade
deficit while misrepresenting what it means for the economy. Free
trade agreements like NAFTA have helped domestic companies compete
in a global economy. As such, the U.S. economy is growing, wages are
strong, and poorer foreign countries are becoming stronger.
Facts
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Since NAFTA was implemented in January of
1994, the unemployment rate has fallen from 6.7% to 5.1%.
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Between 1993 and 2003, 18 million jobs were
created as manufacturing output rose 41%.
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During the past 15 years, the number of
manufacturing jobs insourced to the U.S. grew by 82%. At the same
time, jobs lost to outsourcing grew by only 23%.
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Between 1980 and 2004 the trade deficit
increased as the economy grew at an average of 3.5%. By contrast,
the economy only grew 1.9% in years the trade deficit shrank.
Relevant Studies
Advisors/Experts
- The Hon. Barbara
H. Franklin, chairman, Asian Studies Center Advisory Council,
The Heritage Foundation. 202-675-1761,
bfranklin@heritage.org
- Fred McMahon,
director, Centre for Globalization Studies, The Fraser Institute.
604-688-0221,
fredm@fraserinstitute.ca
- Bruce Bartlett,
senior fellow, National Center for Policy Analysis. 972-386-6272,
bbartlett@ncpa.org
Updated June 2005 •
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