Social Benefits Of Free Trade Agreement

Hafner-Burton, E.M. Forced to be good: why trade agreements strengthen human rights. Ithaca: Cornell University Press. The growing rhetoric on the imposition of tariffs and the restriction of international trade freedom reflects a resurgence of old arguments, which remain largely alive, because the benefits of international free trade are often diffuse and difficult to discern, while the benefits of protecting certain groups from foreign competition are often immediate and visible. This illusion feeds the general perception that free trade harms the U.S. economy. It also tilts the balance in favour of special interests seeking refuge from foreign competition. As a result, the federal government is currently imposing thousands of tariffs, quotas and other trade barriers. Hiscox, M., Hainmueller, J. (2006). Learning to love globalization: the impact of education on individual attitudes towards international trade. International Organization, 60 (2), 469-498.

Jinnah, S., Lindsay, A. (2016). Interconnection of problems: environmental standards in U.S. trade agreements. Global Environmental Politics, 16(3), 41-61. The definition of fair trade by the World Trade Organization and various fair trade organizations also emphasizes farmers` working conditions, poverty and ethical business practices. In a free trading environment, goods can go from anywhere. In the end, more things move to more places.

While this can have a very positive impact on consumer choices and prices, it means more transportation, which burns more fuel and therefore has effects on air pollution. If, for example, a French consumer once had only one kind of local salad, but can now choose between five varieties of salads from five different countries, much more fuel is burned per French salad. Due to the increase in emissions from land and food transport, the EU is considering implementing taxes on emissions and freight related to food transport in order to cope with the increasing impact on the environment. Bhagwati, J. (1995). Trade liberalization and „fair trade“ demand that environmental and labour standards be tackled. The global economy., 18 (6), 745-759. Social standards NTPs increase foreign direct investment in green and highly skilled industries and reduce them for low-skilled workers and environmentally harmful workers (Lechner 2018). We note that the cumulative decline in IPV over the 1993-2013 period, due to trade agreements, was 0.24% in our baseline estimate. Of this overall effect, we account for about 55% of the direct impact on the prices and quality of imported products.

The remaining 45% is due to lower input prices, adjusted for quality, which reduces the prices of domestic products. Although this is not a major effect, it represents a considerable saving for EU consumers, around EUR 24 billion per year. Honestly, S. D. (2010). The challenge of fair trade to integrated liberalism. International Studies Quarterly., 54 (4), 1013-1033. We provide estimates of the overall impact of 39 trade agreements implemented during our sampling period on consumer well-being and break down the overall contribution effect resulting from changes in price, quality and variety.

Everywhere, we define the EU as the 12 Member States before enlargement in 1995 (EU 12) in order to maintain a coherent group of countries for analysis. Milewicz, K., Holloway, J., Peacock, C., Snidal, D (2016). Beyond trade: the broader scope of the non-trade agenda in trade agreements. The Journal of Conflict Resolution., 62, 743-773. Our approach does not allow us to identify the exact sources of these quality improvements, but we discuss possible mechanisms. One explanation that is consistent with growing literature using data at the enterprise level is that foreign exporters improve the quality to serve the EU market after the implementation of trade agreements (2008, Iacovone and Javorcik