Recent research reveals the surprising unintended consequences of free trade
- By Joshua E. KeatingJoshua E. Keating is an associate editor at Foreign Policy.
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.
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.
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.
Clyde Prestowitz is the founder and president of the Economic Strategy Institute (ESI), where he has become one of the world's leading writers and strategists on globalization and competitiveness, and an influential advisor to the U.S. and other governments. He has also advised a number of global corporations such as Intel, FormFactor, and Fedex and serves on the advisory board of Indonesia's Center for International and Strategic Studies.| Prestowitz |
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and a senior editor at The National Interest. Prior to Fletcher, he taught at the University of Chicago and the University of Colorado at Boulder. Drezner has received fellowships from the German Marshall Fund of the United States, the Council on Foreign Relations, and Harvard University. He has previously held positions with Civic Education Project, the RAND Corporation, and the Treasury Department.| Daniel W. Drezner |