Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Non-Balanced Trade Agreements Cost Jobs
Jesse Richman, 9/20/2013
In a recent posting on the Campaign for America's Future website, Dave Johnson reviews the poor record of three recent trade agreements. The critical issue he raises is that many of these agreements have been followed by rapidly deteriorating balances of trade, and as a result they have cost jobs.
As Dave Johnson recognizes, the fundamental flaw with the analysis that free trade increases the number of jobs for both trading partners is that it assumes balanced trade. If the increased trade after a trade agreement is in the following form: Country A borrows from Country B to buy more of Country B's products, no new jobs will be created in Country A because there will be no new production in Country A. Just new debt.
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