Among criticisms of pending Free Trade Agreements is the charge that such deals are structured in ways that keep the poor from improving their lot. In a piece at The American Interest, economist Jagdish Bhagwati throws some cold water on such claims.
In fact, Bhagwati says a moral case can be made on behalf of free trade.
“Contrary to what skeptics often assert, the case for free trade is robust,” writes Bhagwati.
Further, he notes, “the dramatic upturn in GDP growth rates in India and China after they turned strongly towards dismantling trade barriers in the late 1980’s and early 1990’s. In both countries, the decision to reverse protectionist policies was not the only reform undertaken, but it was an important component.”
In India “the shift to accelerated growth after reforms that included trade liberalization has pulled nearly 200 million people out of poverty. In China, which grew faster, it is estimated that more than 300 million people have moved above the poverty line since the start of reforms.”
Bhagwati claims “If freer trade reduces poverty, it is presumptuous for the critics to claim greater virtue. In truth, the free traders control the moral high ground: with at least a billion people still living in poverty, what greater moral imperative do we have than to reduce that number? Talk about ‘social justice’ is intoxicating, but actually doing something about it is difficult. Here the free traders have a distinct edge.”