After World War II, the US slashed its average tariffs from 40% to 4% and created the GATT world trade system. Most industrial countries followed the American lead. International Trade boomed.

How much did trade benefit the US economy? About $1.3 trillion more per year. Household incomes rose $10,000 larger per year. This does not unilaterally benefit the US either. Mexico has greatly benefited from NAFTA, particularly Northern Mexico.

I could wax prosaic about the productivity benefits of comparative advantage and faster technological growth. This is possibly an underestimate. The US economy as a whole is built around foreign trade.

First one of many studies of the direct benefits to the US economy and individual households:

The Payoff to America from Globalisation
Bradford, Grieco, and Hufbauer

This article summarizes the economic payoff to the United States from its postwar trade opening and estimates the potential future gains from more opening going forward. To quantify these gains, we survey different methodologies and estimates. We find that trade opening since World War II has added between $800 billion to $1.4 trillion to the US economy, or about $7,000 to $13,000 per household. More speculative estimates of the potential additional gains from removing the rest of US trade barriers range from $400 billion to $1.3 trillion, or about $4,000 to $12,000 per household. Since trade opening permanently raises national income, these gains are enjoyed annually. Trade opening inevitably entails adjustment costs. We estimate that the lifetime cost of all worker dislocations that have been triggered by expanded trade in the United States could be as high as $54 billion, although probably less. The permanent gains from past and potential liberalization easily swamp the modest sums necessary to alleviate the temporary pains of adjustment. In the future as in the past, free trade can significantly raise income and quality of life in America.

This estimates the overall benefit to be $800 billion – $1.4 trillion with a cost of $54 billion. That’s even better than I expected.

Likewise, Mexico:
Globalization, Labor Income, and Poverty in Mexico
Gordon H. Hanson

Abstract: In this paper, I examine changes in the distribution of labor income across regions of Mexico during the country’s decade of globalization in the 1990’s. I focus the analysis on men born in states with either high-exposure or low-exposure to globalization, as measured by the share of foreign direct investment, imports, or export assembly in state GDP. Controlling for regional differences in the distribution of observable characteristics and for initial differences in regional incomes, the distribution of labor income in high-exposure states shifted to the right relative to the distribution of income in low-exposure states. This change was primarily the result of a shift in mass in the income distribution for low-exposure states from upper-middle income earners to lower income earners. Labor income in low-exposure states fell relative to high-exposure states by 10% and the incidence of wage poverty (the fraction of wage earners whose labor income would not sustain a family of four at above-poverty consumption levels) in low-exposure states increased relative to high-exposure states by 7%.

Northern Mexico is exposed to greater globalization than Southern Mexico (roughly), especially regions like the Chiapas.

So remember, autarky means poverty and misery.

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