“Trump seems to think trade is a zero-sum affair, in which a deficit is a sign of a bad deal. But the vast improvement in living standards after the second world war went hand in hand with a rapid expansion in world trade over eight trade rounds, each of which lowered barriers. Imports are in fact welcome, because they benefit consumers and spur producers to specialize in what they do best,” The Economist says.
“Without the WTO, cross-border trade would continue—it is unstoppable—but the lack of norms and procedures would leave disputes to escalate. The fewer the rules, the more scope for mercantilist mischief and backsliding. Trade policy could be captured by special interests. Military power would hold greater sway in trade disputes than economic fair play. Transnational investment could drain away. As a vast continental economy, America would lose less from this than other countries. It would nonetheless lose a lot, including a pillar of the system that has underpinned its post-war political influence.”
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