The World Trade Organization announced this week that it expects global trade to grow much slower than originally projected.
WTO analysts, who projected global trade would grow by 2.8 percent this year, now expect it to grow by 1.7 percent, the lowest rate since 2009.
Trade growth rates in North America contributed to the WTO’s revised projection. Analysts now expect the region’s imports to grow by 1.9 percentage points, a significant drop from the 6.5 percent growth rate in 2015.
WTO Director-General Roberto Azevêdo said this slow growth:
should serve as a wake-up call. It is particularly concerning in the context of growing anti-globalization sentiment. We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system.
The benefits of trade are made clear each year in The Heritage Foundation’s Index of Economic Freedom, echoing the World Trade Organization’s sentiments. Countries with greater trade freedom have higher per capita incomes and lower rates of poverty, and do a better job at protecting the environment.
The United States has an average tariff rate of 1.5 percent and currently is ranked 40th in the world for trade freedom. But the federal government still protects many sectors.
Special interest tariffs and nontariff barriers for domestic sugar producers, truck manufacturers, steelmakers, and footwear producers, just to name a few, hinder Americans’ freedom to trade. They are really just another tax on American consumers—just one more thing that makes it harder for average families to get by.
The United States should reject protectionism and embrace the principles of free trade, which expand economic opportunity for all Americans.
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