This weekend Western Hemisphere heads of state will meet at the Summit of the Americas in Quebec to discuss trade liberalization. There is much to discuss, and a great opportunity to be seized, in advancing the welfare of people everywhere.
Anti-trade activists will hope to discourage further trade liberalization. Their case, however, cannot survive a look at the facts:
Open economies have grown three times as fast as the least-open economies over the past 30 years. Although some workers in particular industries have lost jobs to imported products, and are understandably concerned about trade, overall job growth in open economies is far higher than in closed systems. Unemployment, in fact, tends to fall as imports grow. Export-related jobs pay 15 percent more than other jobs. And environmental improvement has been the greatest in wealthier countries, which also happen to have the most-open economies.
With the advantages so obvious, it is unfortunate that they are not better understood and that fears of the effects of openness work to stall progress on further liberalization.
The summit is clearly a place to rejuvenate the process. A key objective is creation of the Free Trade Area of the Americas, which would eventually extend the advantages of more-open commerce throughout the hemisphere. To make this a reality, the United States will need to pass Trade Promotion Authority, formerly called Fast Track Authority. It gives the president the negotiating credibility to construct a balanced agreement that will be approved by the U.S. Congress.
While multilateral liberalization is vital, it will take time. Meanwhile, the United States should conclude selected bilateral trade liberalization agreements. The most important of these are with Singapore and Chile.
Singapore and Chile are among the most welcoming countries to international trade and investment. Not surprisingly, their long record of high economic growth reflects that successful choice. Further liberalization of trade and investment with the United States will promote additional economic gains for all these countries, as well as for Mexico and Canada, which are linked to the U.S. economy through NAFTA. Moreover, bilateral arrangements with such open economies as Chile and Singapore will serve as an example to other, and often struggling, economies of the many advantages of international trade and investment.
Clearly, labor and environmental issues will be raised as part of all these trade initiatives. The watchwords, however, should be liberalization, not restriction; openness, not obstacles; incentives, not sanctions.
The Quebec Summit presents a hopeful place to start anew on trade liberalization. Statesmanship and vision will be needed, but the rewards for success are too important not to proceed with vigor.
