The Global Economy and Free Trade. How does it affect jobs? How does it affect the American Economy and GDP?
Any understanding of global economics requires an understanding of free trade. Elsewhere you will find a video on David Ricardo and his seminal theory of comparative advantage. In the video below, however, we engage in an enlightening and more contemporary discussion about a very important and controversial and powerful body that most folks know little about, the World Trade Organization (the WTO). Of course, President Trump has recently engaged in a policy of attacking and/or undoing many of multilateral treaties and agreement that have numerous member parties, much like the WTO has numerous members. The current policy of the President appears to be to threaten to engage in trade wars (which the WTO was designed in large part to prevent) as a means to gain leverage to achieve more advantageous “bilateral” treaties with just two or three signatory nations. Because all nations are growing increasingly interdependent from an economic perspective (it’s a world economy now),, all people should understand the system that is in place right now to determine if the trade policy being pursued by the Trump administration is a wise one.
The WTO was established in 1995 to help the global economy run smoothly. It is a controversial organization despite the fact that, It has vital dispute resolution powers that have been agreed to by all of its members including the United States, China, the European Union, Japan and Russia. Others such as India and Brazil are also members.
The World Trade Organization members account for 98 percent of global economic activity. No discussion about exports, imports, overseas jobs is complete without a firm grasp of how the WTO affects trade in not only goods, but services as well. Patents and agriculture are topics of concern as well. We also have a video on Free Trade Theory (David Ricardo’s Theory of Comparative Advantage) on Youtube.
Here we break out real numbers taken from the US Labor Department, the US Census and other reliable sources to lay out the vital facts to determine if free trade and the World Trade Organization are beneficial and effective or if they cause a loss of jobs and a reduction in the standard of living of workers in the U.S.