ABSTRACT FROM CATO
By promoting free trade, the World Trade Organization helps pursue global competition between producers. Competition has many effects, including lower product prices, higher productivity, increased wages, and improve standards of living. Though some argue that free trade has eroded wage levels, they miscalculate inflation levels and disregard the increase of non-wage benefits. Moreover, with a decrease in trade restrictions and allowing freer trade, the standards of living for many Americans have increased over the last few years. Opponents of free trade also believe that American manufacturing will be hit the hardest, but increased manufacturing output over the last few years refutes that argument. The trade deficit does not reflect trade barriers, but increased foreign investment, suggesting that trade liberalization should have no effects on the trade deficit.
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