Global trade is a complex creature that requires cooperation across national borders and between governments and businesses. But what it delivers is simple: jobs and higher living standards.
Growth in trade since World War II had added an average of about $1 trillion a year to America's income(in 2003 dollars), according to economists at the Peter G. Peterson Institute for International Economics. And if the world's remaining barriers to trade and investment were to fall, global trade would add another $500 billion to domestic wealth creation each year.
That's the good news. The bad news is that the importance of trade and its value to our economy is being lost amid the current global economic crisis. There is an increasing number of voices calling for protection policies. For the first time in decades, trade is declining across the world. That should worry every American.
There is a mistaken belief that America can go it alone -- that by closing its borders to trade it can retain jobs and grow independent of the world. But that isn't true. The economy will not grow in isolation and enacting laws that require governments to "Buy American" or protecting specific industries -- such as agriculture -- from trade competition will only hurt economic growth. Trade barriers force us to pay more than we need to for goods and services and make it harder for our companies to compete.
If national leaders turn to protectionism for domestic political reasons, we'll likely see policies that do lasting damage to global trade flows.