{"id":3359,"date":"2016-07-15T17:04:27","date_gmt":"2016-07-15T21:04:27","guid":{"rendered":"http:\/\/162.223.13.186\/~zacksim\/free-trade-vs-protectionism-where-i-stand\/"},"modified":"2022-02-26T13:22:12","modified_gmt":"2022-02-26T13:22:12","slug":"free-trade-vs-protectionism-where-i-stand","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/free-trade-vs-protectionism-where-i-stand\/","title":{"rendered":"Free Trade vs. Protectionism \u2013 Where I Stand"},"content":{"rendered":"

The aftermath of the \u201cBrexit\u201d vote is sure to create plenty of winners and losers, but perhaps most-watched will be those affected in the realm of trade. At this stage, there\u2019s no sense in speculating how the trade relationship between Britain and the EU will ultimately look\u2014 there are far too many unknowns. But, what is <\/em>worth a closer look is how the Brexit vote has seemingly stirred a movement\u2014one that is bringing into question the benefits of globalization and trade.<\/p>\n

Is Free Trade on the Chopping Block?<\/strong><\/p>\n

Something we learned from those leading the \u201cLeave\u201d campaign in Britain was how effective it was to appeal to isolationism. Boris Johnson and Nigel Farage focused their messages on how Britain could do it all on their own\u2014no need for Brussels bureaucracy, no need for a trade deal they felt benefited the EU more than Britain, no need for labor coming from other countries.<\/p>\n

Readers may have a strong opinion on the topic of \u2018trade\u2019 one way or the other, some even more so who have been directly affected by it with a job loss. The economic benefits of trade are very difficult to measure directly, but the costs are quite tangible (job losses, immigration) and it is easier to see trade hurting more than it helps. In this sense, the emotional argument often trumps the analytical one.<\/p>\n

As a career asset manager, I\u2019m hard-wired to put my weight behind the analytical when it comes to cost\/benefit analysis, and for trade I\u2019m convinced that freer is almost always better. There is a relatively new data set available that supports this case. The Organization for Economic Development (OECD) and the World Trade Organization (WTO) have created a joint initiative to better measure how countries, in their trade relationships, benefit from and contribute to total output.<\/p>\n

The metric is known as the Trade in Value-Added (TiVA) and, in the WTO and OECD\u2019s words, it\u2019s \u201cthe value added by each country in the production of goods and services that are consumed worldwide.\u201d A look at some of the findings reveal quite a few highlights:<\/p>\n