TY  - JOUR
AU  - Freeman,Richard B.
TI  - Trade Wars: The Exaggerated Impact of Trade in Economic Debate
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10000
PY  - 2003
Y2  - October 2003
UR  - http://www.nber.org/papers/w10000
L1  - http://www.nber.org/papers/w10000.pdf
N1  - Author contact info:
Richard B. Freeman
NBER
1050 Massachusetts Avenue
Cambridge, MA  02138
Tel: 617/868-3900
Fax: 617/868-2742
E-Mail: freeman@nber.org
AB  - The rules governing trade and capital flows have been at the center of controversy as globalization has proceeded. One reason is the belief that trade and capital flows have massive effects on the labor market -- either positive, per the claims of international financial institutions and free trade enthusiasts, or negative, per the ubiquitous protestors at WTO, IMF, and World Bank meetings demanding global labor standards. Comparing the claims made in this debate with the outcomes of trade agreements, this paper finds that the debate has exaggerated the effects of trade on economies and the labor market. Changes in trade policy have had modest impacts on labour market. Other aspects of globalization -- immigration, capital flows, and technology transfer -- have greater impacts, with volatile capital flows creating great risk for the well-being of workers. As for labor standards, global standards do not threaten the comparative advantage of developing countries nor do poor labor standards create a  race to the bottom'.
ER  -