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Thursday, January 27, 2005
Three cheers for free trade
This post's for you Norm (Shotgun CanCon Czar) Spector.
Virginia Postrel writes in the New York Times (oops -- I hope this still counts) about a paper by University of Toronto economist Daniel Trefler that illustrates that Canadian manufacturing saw a short-term dip in employment before recovering. Postel writes:
"Not surprisingly, the Canadian industries that had relied on tariffs to protect them 'were hammered' when those barriers disappeared, Professor Trefler said. 'They saw their employment fall by 12 percent,' he said, meaning one in eight workers lost their jobs. In manufacturing as a whole, the trade agreement reduced employment by 5 percent.
'Employment losses of 5 percent translate into 100,000 lost jobs and strike me as large,' he wrote, 'not least because only a relatively small number of industries experienced deep tariff concessions.'
... As painful as those layoffs were, however, the job losses were a short-term effect. Over the long run, employment in Canada did not drop, and manufacturing employment remains more robust than in other industrialized countries.
'Within 10 years, the lost employment was made up by employment gains in other parts of manufacturing,' Professor Trefler found.
While low-productivity plants shut down, high-productivity Canadian manufacturers not only expanded into the United States but further improved their operations. Along the way, they hired enough new workers to make up for losses elsewhere."
Furthermore, there were aslo increases in earnings and productivity and no increase in wealth inequality. No wonder Jean Chretien broke his free trade promise. What I don't understand is why conservatives -- and Conservatives -- don't do a better job explaining that the benefits of free trade are a result of policies that they fought for and implemented and that the Liberals initially opposed.
Posted by Paul Tuns on January 27, 2005 in Canadian Politics | Permalink
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» Virginia Postrel on free trade from Libertarian Girl
Economists argue for free trade. They have two centuries of theory and experience to back them up. And they have recent empirical studies of how the liberalization of trade has increased productivity in less-developed countries like Chile and India. [Read More]
Tracked on 2005-01-28 10:00:58 PM
Comments
Having played a small part in the negotiation, I would not have wanted to miss that article and thank you for pointing it out, and don't even mind your little dig.
Posted by: Norman Spector | 2005-01-28 1:39:02 AM
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