>>More people benefit from international trade than are hurt from it.<<
Historically, the WTO's (World Trade Organization's) arrival was a big step forward from the earlier GATT (General Agreement on Tariffs and Trade) system which began after the end of WW II. The GATT system had been established so that world trade would not once again revert to the chaos of the 1930s when nations acted to defend their internal producers by piling up tariff walls, while simultaneously trying to assist their exporters with governmental subsidies so that they could sell at prices lower than their real costs. This led to REAL trade wars. This also did more to bring about WWII than almost any other factor.
The central principle of the GATT was the "most favored nation status" rule. This meant in practice that a trade access granted to one nation in GATT would automatically be granted to all other member nations in GATT. The result, after WWII, was that the West's trade barriers came tumbling down.
Consumers in all Western nations suddenly had access to foreign goods simply unavailable in the 1930s, most often at lower prices and of better quality. Living standards climbed across the West as export industries revived. This lowered unemployment and living standards climbed even higher. The GATT itself had many trade rounds where many tariff cuts were made. The general rule was that instead of only applying to a specific nation or a smaller group of nations, they applied to GATT's total membership. The West was, in steps, back on the road towards free trade. Later, the WTO came forward to enroll all the rest of the world (including the "third world") into an expanding and ever more free trade.
>>Shut off international trade and you will cause a lot of problems for people, and hurt not just the wealthy but people across the economic spectrum.<<
With the failure of the WTO's Doha Round, world trade will revert again to country-specific bilateral trade deals, followed by economic sector-specific deals. The economic result of each such "deal" will be that total world trade will first slow down and then start to contract. At that point, the world will be a step away from rolling backwards into the protectionism which destroyed world trade in the 1930s. Prices of imports will start climbing and across the world, export industries will contract. In nation after nation, slowly at first but accelerating over time, real living standards will fall.
The political doors for full-scale, worldwide trade wars are again swinging wide open. It's a tragedy. |
