China's opening to world trade has brought it growth in income from $1460 a head in 1980 to $4120 by 1999. In 1980, American's earned 12.5 times as much as the Chinese, per capita. By 1999, they were only earning 7.4 times as much. The gap between rich and poor is also shrinking with most nations in Asia and Latin America.
Many people believe that exports create jobs, and imports cost jobs and that it therefore makes sense to have barriers against imports. This thinking led to the Great Depression in 1930, because so many countries had erected barriers against imports that global trade fell with catastrophic consequences.
Most exports also use some imports. To take a simple example, a country might export packaged sugar, but import the packets. Lowering import barriers makes export industries even more efficient and competitive in world markets. Countries that lower trade barriers concentrate their national energies in industries they are good at, where they have an international advantage. Import barriers encourage countries to focus efforts in industries where they do not have any advantage. It leads to wasteful and lazy investment. There is evidence that developing countries that erect barriers to imports have slower growth in incomes than those that are open to trade.
Companies of all sizes are involved in world trade - the benefits do not just flow to large multi-nationals. In most trading nations, raging from Thailand to France, small firms employing less than 200 people account for between 10 and 25% of exports.
Anti-globalization.
The World Trade Organization agreements on free trade have functioned principally to prize open markets for the benefit of transnational corporations at the expense of national economies; workers, farmers and other people; and the environment.
The WTO should not solely focus on opening markets but also allow trade to be restricted to support human rights, labor rights and environmental objectives in other countries.
