Strange Trade

Recent research reveals the surprising unintended consequences of free trade

BY JOSHUA E. KEATING | NOVEMBER 2011

Free trade advocates say it's an engine of economic growth; opponents think it perpetuates global inequality. But the unintended effects of all that cross-border traffic -- which has nearly quadrupled around the world since 1990 -- may be even more interesting. Here's a look at some of the most surprising conclusions from recent research on trade.

1. Trade makes countries shrink.
Increased international trade lowers a country's birth rate, in part because it exposes countries to gender norms that bring women out of the home and into the workplace.

--John A. Doces, International Interactions

 

2. Trade is less important than marriage.
Facing a shortage of available wives, Chinese families are increasing their savings rates to increase their sons' competitiveness in the marriage market. This drives down China's exchange rate, contributing to a global trade imbalance.

--Qingyuan Du and Shang-Jin Wei, National Bureau of Economic Research

 

3. Trade built the ancient civilizations of Mesoamerica.
"Far from being isolated developmentally, [the cacao trade] integrally tied populations in the American Southwest to the socio-political and economic activities of Mesoamerican states."

--Dorothy K. Washburn, William N. Washburn, and Petia A. Shipkova, Journal of Archaeological Science

 

4. Trade doesn't turn low-tech countries into high-tech ones.
Despite hopes that globalization would allow developing countries to innovate themselves into prosperity, 30 years of increased trade has only brought steeper and more intransigent gaps between low-tech and high-tech countries, with the high-tech countries maintaining their edge through specialization that can take years to match.  

 

5. Trade can improve your basketball game.
An increase in the number of foreigners playing in domestic basketball leagues correlates with improved performance for the national team, even if it's composed only of domestic players.

--J. Alvarez, D. Forrest, I. Sanz, and J.D. Tena, Labour Economics

 

ISMOYO/AFP/Getty Images

 SUBJECTS: TRADE, ECONOMICS
 

Joshua E. Keating is an associate editor at Foreign Policy.

HOLLYRYE

8:48 PM ET

October 19, 2011

Tarrifs will save our country

I think all our trade deals should be done away with and we should implement harsh tariffs on imported goods as soon as possible. People always say the jobs are gone and they are not coming back but that is a lie. The jobs would come back in a heartbeat if there was an expensive import tax and it was suddenly cheaper to manufacture domestically than to manufacturer in another country.

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DOMINOES

1:02 PM ET

October 29, 2011

there's some truth to this

While some of these points are more important than others, it makes me wonder how important trade is to the world, and if there is any way to stop it. I think tariffs can help, but overall it will be hard to stop the momentum going forward. This is just the way I see it, but with the large amounts of money behind all of this, there is little that we can do to stop it all, the only way to to tax trade and use collectionagency...but the world does seem to be a better place with all of this free trade, so is it really such a bad thing that we have it all?

 

YARINSIZ

12:34 PM ET

November 5, 2011

I think tariffs can help, but

I think tariffs can help, but overall it will be hard to stop the momentum going forward. This is just the way I see it, but with the large amounts of money behind all of this, there is little that seslichat we can do to stop it all, the only way to to tax trade and use collectionagency