#1 - Trade makes the world better off. It should be more popular.
Trade among nations makes the world better off. When we buy a good or a service produced abroad at lower cost, living standards on both sides of the trade increase. Societies gain when countries trade. Nonetheless, protectionist ideas are gaining support around the world. This serves to enrich a few and damages the interests of many. We believe that protectionists are getting it wrong and we are going to show why in ten stories over the coming 10 weeks. Here is the first about how both sides win when trading.
The trade balance of the EU-28 with the rest of the world is positive. Businesses earn more by selling products and services than they spend on imports, calculates the European Commission's chief economist. The EU-28 ran a trade surplus for goods equal to EUR 11.1 billion in 2014. The European Commission’s strategy of liberalising tariffs and facilitating exchange with the world certainly benefits the European economy and citizens.
This is not a zero sum game: “The world has made extraordinary progress in lifting people out of extreme poverty. Between 1990 and 2010, their number fell by half as a share of the total population in developing countries, from 43% to 21% - a reduction of almost 1 billion people,” writes the newspaper The Economist. Extreme poverty is defined internationally as living below USD 1.90 a day. The World Bank has the figures available on their website.
The Millenium Development Goals and now the Sustainable Development goals have done much to help the world’s poor, by creating a yardstick for measuring progress. But capitalism and free trade are the factors which enable economies to grow and it was growth, principally, that has eased destitution. Freeing trade between countries will let more poor people get richer.
There is an important role for stakeholders to support developing countries in developing governance structures that enable inclusive and sustainable growth.
This is the first of ten messages on international trade, which we will publish over the coming weeks. If you like this, if you would like to respond, please send us a message via our contact form. If you would like to sign up for future updates, please subscribe below.