How Trade Advances Global Prosperity at GBF 2018



Cucumbers. Graham crackers. Cookies! Ooh. Lucky! My mom puts cucumbers in her tacos. They're crunchy. Why don't I trade you my cucumbers for your graham crackers? I want a graham cracker. I'm not gonna trade down. You have a graham cracker surplus. Fine. You trade me half of your cookies, and I will countertrade half of my graham crackers. I'll directly export the remaining graham crackers for your full cucumber yield. Deal. Deal. Deal. Trade, good for me, good for them. Win, win, win. When we trade goods and
services, we also trade ideas. We learn about cultures
from all over the world and really realize how
beautiful the world is in its diversity. The trading system is a very valuable component to the world economy. Trade brings countries together in ways that are often good from the point of view of peace. that are often good from the point of view of peace. Countries that are both intimately intertwined in the same supply chain are gonna get richer faster. And they're less likely to go to war. When developing countries, in particular, open up to trade, that creates not just abundance but creates hope because it is creating opportunities for people to see a path for them to be better off and their children to be better off. There is no reason that two nations, actively trading with each other, can't have growing workforces, each specializing in what they're good at. When we specialize, we can earn higher income. When families have higher income, they can afford to send their children to school. When people are more educated, they can be more productive participants in global economy, and they can also cope better with the hardship of international trade. When domestic economy is not performing very well, it's easy and it's tempting to blame other countries for that. If you do so through trade measures, often you'll make the situation worse. The way to deal with this political backlash is to accept these negative consequences and address them. The best way to manage the ups and downs of trade is to strengthen your floors, is to strengthen your floors, not raise your walls or build ceilings. Globalization is not something we can hold off or turn off. It is the economic equivalent of a force of nature. What that does is is it gets people thinking about investing in their own futures, investing in their children's futures. This reduces inequality, it adds to employment, it reduces insecurity. And it creates this dynamic that, I think, leads to hope for the future.

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