by Timothy Moreland

Created on: April 30, 2008

The common anti-free-trade arguments are nothing more than fallacies. Some argue that protection of industries help to create jobs for the economy, while free trade will sacrifice jobs. A common argument follows from this that, "opening up markets will allow foreigners to take Americans' jobs, leading to greater unemployment." As proof, according to Survey of Americans and Economists on the Economy, the public believes that "trade agreements between the United States and other countries have cost the U.S. jobs." Leading figures in America have not helped to deter this belief. 2008 Presidential hopeful Senator Barack Obama has falsely claimed, "one million jobs have been lost because of NAFTA, including nearly 50,000 jobs here in Ohio." This, however, does not stand up to empirical evidence. Following the North America Free Trade Agreement, the U.S. economy added jobs. In the ten years following the agreement, the economy "added a net 18 million new jobs." As well, the unemployment rate in 2004 was lower than 1993, the year following NAFTA. According to a CATO study, "Trade has had no discernible, negative effect on the number of jobs in the U.S. economy. Not only does trade not impact the unemployment rate but more trade is in fact a blessing for an economy." The effect of NAFTA was unlikely the addition of all these jobs, but it would be ludicrous to claim that the net effect was that jobs were indeed lost.

Branching from this fallacy, it is assumed that the addition of jobs is a good think in and of itself. However, this does not make much sense. In the words of Milton Friedman, "If all we want are jobs, we can create any number for example, have people dig holes and then fill them up again, or perform other useless tasks." It should not be the aim of a country to merely produce jobs, but to produce jobs that that are in fact productive. Free trade does just that. As CATO research has shown, "The large majority of Americans, including the typical middle-class family, is measurably better off today after a decade of healthy trade expansion." In other words, what free trade agreements do is trade worse jobs in the economy for better jobs, while not affecting the unemployment rate. Protection of an industry, while oftentimes well intentioned, harms more people than it helps. As Former Federal Reserve Chairman Alan Greenspan explains, "To the extent that governments protect' portions of their populations from what they receive as harsh competitive pressures, they

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