David R. Henderson  

Henderson on NAFTA and Mercantilism

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Those statements are true. But they leave out something just as important: If NAFTA were eliminated, not just U.S. tariffs and restrictions on Canadian exports, but also Canada's tariffs and restrictions on Canada's imports would rise. So even if we restrict ourselves to considering the well-being of Canadians, Robertson has left out approximately half the gains from trade--the gains to Canadians from getting U.S. (and Mexican) goods more cheaply. If you don't understand that consumers gain from more competition, well, you've missed a lot.
This is an excerpt from David R. Henderson, "The case for free trade should not rely on mercantilism," Fraser Institute blog, March 23.

I recommend (obviously) the whole piece, which is not long.


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COMMENTS (2 to date)
Ryder writes:

It is these consumer benefits that get overlooked time and again. Not least because the Consumers Lobby is not a thing. But there are plenty of Producer Lobbies.

Thaomas writes:

I think it is more important to focus attention on the damage to exports that increased import tariffs do (Learner Theorem) to this one ADDS the effect of Mexico and Canada increasing tariffs on US imports. If you tell me that NAFTA harmed workers in industry x in place y at time z I'd say you may be right. [And maybe something should have been done to assuage the harm to these workers.] But that is not the same as asserting that NAFTA cause net harm, not even to workers of characteristics similar to xyz workers.

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