For Richer or Poorer: Facts and Fiction about Trade and Economic Gains in the Developed World and Economic Results of the WTO in the U.S.
“WHOSE TRADE ORGANIZATION? The Comprehensive Guide To The WTO” Excerpts from the new book by Lori Wallach and Patrick Woodall of Public Citizen
By Lori Wallach and Patrick Woodall
In the early 1990s, many economists argued that the opening of foreign markets for U.S. exports under NAFTA and the WTO would create jobs and increase income in the U.S. As Congress was considering the WTO and other Uruguay Round agreements in 1994, the President’s Council of Economic Advisers claimed that the adoption of the package would increase annual U.S. GDP by $100-200 billion over the next decade. Others claimed that its adoption would lead to a decline in the U.S. trade deficit. President Clinton even went so far as to promise that that the average American family would gain $1700 annually from the WTO’s adoption. The growth projections were revised drastically downward shortly after the WTO came into effect. By 2002, the U.S. trade deficit has grown to more than four times its pre-WTO size, and millions of U.S. jobs—including almost two million manufacturing jobs—have been lost during the era of the WTO. Annual average U.S. family income did not increase by $1700 in any year since the WTO passed, much less in each year. Indeed, as this chapter describes, one cannot prove, either using trade theory models or empirically, that most Americans have benefited from the WTO—yet it can be shown that the economic well-being of many has declined. In short, few of the claims made about the benefits that would flow from greater trade liberalization can be shown to have been even remotely accurate. This, however, has not stopped another round of ridiculous projections and promises regarding the economic benefits that would follow if a “Doha Round” is launched.