Friday, March 23, 2007


The mission of the Cato Institute Center for Trade Policy Studies is to increase public understanding of the benefits of free trade and the costs of protectionism.

Scholars at the Cato Trade Center recognize that open markets mean wider choices and lower prices for businesses and consumers, as well as more vigorous competition that encourages greater productivity. These benefits are available to any country that adopts free trade policies; they are not contingent upon reciprocal policies in other countries. It is a mistake to regard liberalization as a "concession" whose main purpose is to open up export markets abroad; such thinking is simply a variant of the mercantilist outlook that gives rise to protectionism in the first place. Studies by Trade Center scholars have found benefits in the elimination of U.S. trade barriers regardless of what other countries choose to do.

The case for free trade goes beyond economic efficiency. The freedom to trade is a basic human liberty, and its exercise across political borders unites people in peaceful cooperation and mutual prosperity. Accordingly, scholars at the Cato Trade Center closely examine the politicization of trade, whether due to simple protectionism or in furtherance of other policy goals. In particular, they question whether foreign policy trade sanctions lead to the desired changes in other countries' policies, or more often injure the very people we most want to help.

The Cato Trade Center focuses not only on U.S. protectionism, but also on trade barriers around the world. Cato scholars examine how the negotiation of multilateral, regional, and bilateral trade agreements can reduce trade barriers and provide institutional support for open markets. Not all trade agreements, however, lead to genuine liberalization. In this regard, Trade Center studies scrutinize whether purportedly market-opening accords actually seek to dictate marketplace results, or increase bureaucratic interference in the economy as a condition of market access. In addition, Cato scholars investigate whether threats of unilateral trade sanctions, even when they occasionally succeed in reducing trade barriers, may foster a political culture hostile to open markets and therefore should be avoided.

Studies by Cato Trade Center scholars show that the United States is most effective in encouraging open markets abroad when it leads by example. The relative openness and consequent strength of the U.S. economy already lend powerful support to the worldwide trend toward embracing open markets. Consistent adherence by the United States to free trade principles would give this trend even greater momentum. Thus, Cato scholars have found that unilateral liberalization supports rather than undermines productive trade negotiations.

The Cato Trade Center seeks to advance its mission by participating aggressively in the trade policy debate. We publish briefing papers, policy analyses, and books; we hold policy forums and conferences; we actively engage policymakers and opinion leaders. Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.

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