PRAGUE – Global free trade provides the greatest opportunity to improve human welfare over the next decade and a half. It has already helped lift more than a billion people out of poverty over the past quarter-century. Lowering trade barriers even more could double average incomes in the poorest parts of the world over the next 15 years.
Yes, there are costs to free trade that must be better addressed; but the costs are vastly outweighed by the benefits. Yet, in rich countries today, the mood has turned against free trade. That is a tragedy.
Nowhere is opposition to free trade louder than in the United States. Regardless of who wins next month’s presidential election, a free-trade skeptic will occupy the White House. Both Hillary Clinton and Donald Trump oppose the biggest trade initiative launched by President Barack Obama’s administration – the Trans-Pacific Partnership (TPP) with 11 other Pacific Rim countries – and both would revisit the North American Free Trade Agreement (NAFTA), which has been in force since 1994.
The other major Obama-led trade initiative, the Transatlantic Trade and Investment Partnership (TTIP) between the US and the European Union, is all but dead, crippled by opposition on both continents and by the UK’s Brexit referendum result, widely interpreted as a vote for protectionism.
Meanwhile, protests opposing free-trade deals are drawing political support and crowds in Germany, Belgium, Canada, Sweden, New Zealand, Australia, and elsewhere.
More than rhetoric has shifted. One study found the use of protectionist policies up 50% in 2015, outnumbering trade-liberalization measures by three to one. Members of the G20 – the world’s major advanced and emerging economies, representing more than four-fifths of global GDP and three-quarters of trade – were responsible for 81% of the punitive measures.
Politicians in rich countries tap into understandable public fear. A trade deal creates adjustment costs concentrated in particular areas, like the US Midwest and South, where manufacturing can be costlier and less efficient than overseas. Shuttered factories serve as highly visible, totemic warnings against open borders.
The far greater benefits of free trade are much less obvious. Consumers get a wider variety of goods at cheaper prices. Middle-class Americans gain an estimated 29% of their purchasing power from foreign trade. In other words, the average middle-class American can buy 29% more for each dollar than if there was no trade. The effect is even bigger – 62% – for the poorest tenth of American consumers.
Trade makes exporters stronger, more efficient, and more productive. The benefits are shared among workers: Obama’s Council of Economic Advisers found that, on average, US export-intensive industries pay workers up to 18% more than non-exporting firms.
Opposition to free trade ignores our interconnected reality. Some 80% of trade happens along supply chains within or organized by transnational firms, according to a 2013 UN report. While some US politicians call for tariffs against Mexico, the National Bureau of Economic Research estimates that about 40% of the value of Mexican imports to the US is actually added within the US itself.
These arguments are all part of the overwhelming economic case for free trade. But the strongest argument is a moral one. Cost-benefit analysis shows that freer trade is the single most powerful way to help the world’s poorest citizens.
Reviving the moribund Doha Development Round of global free-trade talks would reduce the number of people in poverty by an astonishing 145 million in 15 years, according to research commissioned by the Copenhagen Consensus Center. The world would be $11 trillion richer each year by 2030, with $7 trillion going to developing countries – equivalent to an extra $1,000 for every person every year in these countries by 2030.
Moreover, trade also carries much broader benefits for society. Economic globalization has been shown to reduce child mortality and extend life expectancy, owing to increased incomes and better information. In the US, trade over the past half-century has increased longevity significantly. In Uganda, freer trade in the past 35 years has been shown to lengthen the average lifespan by 2-3 years.
What’s more, “free trade is good for the environment,” to quote one academic study. This may seem counterintuitive. But, although each 10% increase in production leads to 2.5-5% more pollution, the higher income from this output drives better technology and more stringent regulations, which in turn reduces pollution by 12.5-15%. In total, a 10% increase in income results in 10% less pollution. This finding is supported by a study concluding that “trade tends to reduce three measures of air pollution.”
At the same time, free trade has been shown to create more jobs for women, reduce employment discrimination, and improve human-rights conditions.
Of course, not everyone benefits from freer trade. Some people lose their jobs, and some of them will struggle to find other work. But it is important to have a sense of the size of the problem.
One recent study suggests that free trade increases income inequality, and the cost of redistribution could erode upwards of 20% of the gains. This indicates we should be willing to spend perhaps 20% of trade benefits on helping the losers from trade deals, through job training and transitional social-welfare benefits to ameliorate the risks.
But it also shows that 80% of the benefits stand – and 80% of $11 trillion is still a whopping $9 trillion in benefits to humanity – on top of a reduction in lower poverty, child mortality, and pollution, higher life expectancy, and less gender- and race-based discrimination.
While the US presidential candidates have adopted protectionist rhetoric, so, too, did Obama as a candidate in 2008. Yet he became an enthusiastic advocate of free-trade deals, especially in his second term. Trade, he says, “has helped our economy much more than it has hurt.” As he leaves office, he has declared this an area of “unfinished business.” So it should be for us all, if we focus less on fears and more on facts.
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Simple Ways to Master the Art of Networking
Don’t bother with your business card; networking success comes from building real relationships.
You arrive alone. Your heart is beating a little faster than normal and suddenly all of your charisma and charm go out the window. You try to lock eyes with someone so that you can find a temporary home in what can feel like a sea of strangers. But everyone looks happily engaged in conversation.
While this might sound like your experience at a middle school dance, it’s also what many people feel when they enter a networking event. These are completely natural reactions, even for the biggest extroverts. The great news is that people go to these events to meet strangers, so you’re in the same position as everyone else. Here are 17 helpful tips for navigating a networking event and making the most of your time there:
- Find the bar! Whether or not you’re drinking, it’s always a great idea to position yourself at the edge of the bar. Many people run for the bar when they get to a networking event in order to get a short respite from an overwhelming entrance. If you position yourself a few steps from the bar, you can easily strike up a conversation as people turn with drink in hand.
- Be yourself. Networking events are meant as jumping-off points for relationship building. If you can’t be yourself, you’ll be starting off these new relationships with a lie. Don’t try to be the person you think others want to meet. Be genuine. The people you connect with when you are authentic are the ones you’ll want to stay in touch with.
- Set reasonable expectations. When attending an event, understand what you are there to do. Is your goal to feel out a new organization and get to know the vibe? Is it to meet five new people? Is it to meet one or two specific people? These are all reasonable expectations and it takes a little pre-planning to set these goals.
- Don’t spread yourself too thin. Start by spreading a large net to test out a handful of organizations and then commit yourself to a only a few as time goes on. You want to become a staple at these events. When you bounce around to too many events where no one knows you, you’re doing yourself a disservice by having to build your brand from scratch in each environment. You’ll also find that networking is a lot more fun when you become a regular. People will sing your praises to new attendees (this is always better than you doing it yourself) and you’ll see lots of familiar faces.
- Take notes. When you ask for someone’s card after having a great conversation, take notes on their business card after they walk away or immediately after the event. This will help you to be more specific in your follow-up.
- Introduce yourself to the organizer. A great way to get to know more about an organization and who is involved is to seek out the event organizer and introduce yourself. He/she can then help point you in the right direction and can introduce you to other attendees to get you off on the right foot.
- Treat people like friends. Would you go to a friend, interrupt his/her conversation, hand over a business card, talk about yourself and then walk away? Of course not. Treat new networking relationships as you’d treat your friendships. Build rapport and trust that business will happen.
- Ask great questions. The only way to get to know someone else is to ask them genuine and thoughtful questions. It’s always best to walk away from a conversation having allowed the other person to speak more than you did. Not only will they feel great about the conversation, but you’ll have gotten to know a lot about him/her, helping you plan and execute your follow-up more thoughtfully.
- Sharing is caring. This is no less true now than it was in kindergarten. If you are willing to share your contacts and resources, others will be more likely to help you as well. Develop a sincerity in your giving nature without expectation of something in return.
- Consider their network. When meeting people, it’s important to remember that even if they can’t help you directly, someone in their network probably can.
- Treat connecting like a puzzle. If you’re asking great questions and considering how you can help others, you’ll naturally start to draw connections between who you are talking to and others in your network. Offer to make these connections! Perhaps they are two people who have the same target client industry, or maybe you know that a contact of yours is looking for the service the other provides. Encourage both parties to follow up with you after they meet so that you can hear what came of their interaction. It will not only pay dividends for you, it will also help you hone your matchmaking skills.
- Don’t be a card spammer. The closest thing to you throwing all of your business cards away is handing them out to anyone and everyone you meet without them asking. If you haven’t built enough rapport with someone to encourage them to ask for your card, don’t offer one.
- Be specific. The more specific you can be about what you do and what others can do to help you (if they ask), the better. Tell them the names of a few specific companies you’re looking to work with.
- Ask yourself why they should care. Consider why the person you’re speaking to should care about what you’re saying. Craft your conversations accordingly. You only have a short time to make an impression, so try to make it favorable.
- Be engaged. Keep eye contact with your conversation partner. Nod your head and tilt your body towards them when you’re speaking. These small cues go a long way towards making them feel like you care, which helps you to build rapport and trust: the foundation on which you can later do business.
- Do NOT “work the room.” Don’t try to meet as many people as possible in a room; focus on making just a few solid connections. People can sense when you’re simply speaking with them to grab their card and go. These short interactions will not be memorable and therefore work against you. Aim to meet a few people and begin a meaningful dialogue.
- Don’t be afraid to join in. There is nothing wrong with joining a conversation and waiting for a natural break in the chatter to introduce yourself. In most cases, the people who are already speaking will enjoy the interruption because it gives them a chance to meet someone new. If you sense that you’ve entered into a serious discussion, it’s okay to politely excuse yourself.
Now you’re prepared to rock your next networking event and hopefully build some meaningful relationships in the process. And remember; do talk to strangers!
See Also: Best Leadership Books for 2015 [Infographic]