Cordell Hull, at the time the US secretary of state, was awarded the Nobel Peace Prize for policies that included his tireless efforts on behalf of multilateral free trade. AP Photo
Cordell Hull, at the time the US secretary of state, was awarded the Nobel Peace Prize for policies that included his tireless efforts on behalf of multilateral free trade. AP Photo

A convincing case for free trade found in the history books



Contrary to what sceptics often assert, the case for free trade is robust. It extends not just to overall prosperity (or "aggregate GNP"), but also to distributional outcomes, which also makes the free trade argument morally compelling.

The link between trade openness and economic prosperity is strong and suggestive. For example, Arvind Panagariya of Columbia University divided developing countries into two groups: "miracle" countries that had annual per capita GDP growth rates of 3 per cent or higher; and "debacle" countries that had negative or zero growth rates. Mr Panagariya, an Indian economist, found commensurate corresponding growth rates of trade for both groups from 1961 to 1999.

It could be argued that GDP growth causes trade growth, rather than vice versa - that is, until one examines the countries in depth. Nor can one argue that trade growth has little to do with trade policy: while lower transport costs have increased trade volumes, so has steady reduction of trade barriers.

More compelling is the dramatic upturn in GDP growth rates in India and China after they turned strongly towards dismantling trade barriers in the late 1980s and early 1990s. In both countries, the decision to reverse protectionist policies was not the only reform undertaken, but it was an important component.

In the developed countries, too, trade liberalisation, which started earlier in the postwar period, was accompanied by other forms of economic opening (including a return to currency convertibility), resulting in rapid GDP growth.

Economic expansion was interrupted in the 1970s and 1980s, but the cause was the macroeconomic crises triggered by the success of the Opec nations and the ensuing deflationary policies pursued by Paul Volcker, the US Federal Reserve chairman at the time.

Moreover, the negative argument that historical experience supports the case for protectionism is flawed. Douglas Irwin, the economic historian, has challenged the argument that 19th-century protectionist policy aided the growth of infant industries in the US. He has also shown that many of the 19th century's successful high-tariff countries, such as Canada and Argentina, used tariffs as a revenue source, not as a means of sheltering domestic manufacturers. Nor should free traders worry that trade openness prevented additional growth for some developing countries, as critics contend. Trade is only a facilitating device.

If your infrastructure is poor, or you have domestic policies that prevent investors from responding to market opportunities (such as south Asia's stifling licensing restrictions), you will see no results. To gain from trade openness, you have to ensure that complementary policies are in place.

But then critics shift ground and argue that trade-driven growth benefits only the elites and not the poor; it is not "inclusive". In India, however, the shift to accelerated growth after reforms that included trade liberalisation has pulled nearly 200 million people out of poverty. In China, which grew faster, it is estimated that more than 300 million people have moved above the poverty line since the start of reforms.

In fact, developed countries also benefit from trade's effect on poverty reduction. Contrary to much popular opinion, trade with poor countries does not pauperise rich countries. The opposite is true. It is unskilled, labour-saving technical change that is putting pressure on the wages of workers, whereas imports of cheaper, labour-intensive goods from developing countries help the poor who consume them.

If freer trade reduces poverty, it is presumptuous for critics to claim greater virtue. In truth, the free traders control the moral high ground: with at least 1 billion people still living in poverty, what greater moral imperative do we have than to reduce that number? Talk about "social justice" is intoxicating, but actually doing something about it is difficult. Here the free traders have a distinct edge.

As the historian Frank Trentmann has demonstrated, the case for free trade was made in 19th-century Britain in moral terms: it was held to promote not just economic prosperity, but also peace.

It is also worth recalling that in 1945, Cordell Hull, at the time the US secretary of state, was awarded the Nobel Peace Prize for policies that included his tireless efforts on behalf of multilateral free trade.

It is time for the Norwegian Nobel committee to step up again.

Jagdish Bhagwati is professor of economics and law at Columbia University and senior fellow in international economics at the US council on foreign relations. He is co-chairman of the UNCTAD panel of eminent persons on development-centred globalisation

* Project Syndicate

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

The specs

Engine: Four electric motors, one at each wheel

Power: 579hp

Torque: 859Nm

Transmission: Single-speed automatic

Price: From Dh825,900

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What is double taxation?
  • Americans living abroad file taxes with the Internal Revenue Service, which can cost hundreds of dollars to complete even though about 60 per cent do not owe taxes, according to the Taxpayer Advocate Service
  • Those obligations apply to millions of Americans residing overseas – estimates range from 3.9 million to 5.5 million – including so-called "accidental Americans" who are unaware they hold dual citizenship
  • The double taxation policy has been a contentious issue for decades, with many overseas Americans feeling that it punishes them for pursuing opportunities abroad
  • Unlike most countries, the US follows a citizenship-based taxation system, meaning that Americans must file taxes annually, even if they do not earn any income in the US.
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Scotland v Ireland:

Scotland (15-1): Stuart Hogg; Tommy Seymour, Huw Jones, Sam Johnson, Sean Maitland; Finn Russell, Greig Laidlaw (capt); Josh Strauss, James Ritchie, Ryan Wilson; Jonny Gray, Grant Gilchrist; Simon Berghan, Stuart McInally, Allan Dell

Replacements: Fraser Brown, Jamie Bhatti, D'arcy Rae, Ben Toolis, Rob Harley, Ali Price, Pete Horne, Blair Kinghorn

Coach: Gregor Townsend (SCO)

Ireland (15-1): Rob Kearney; Keith Earls, Chris Farrell, Bundee Aki, Jacob Stockdale; Jonathan Sexton, Conor Murray; Jack Conan, Sean O'Brien, Peter O'Mahony; James Ryan, Quinn Roux; Tadhg Furlong, Rory Best (capt), Cian Healy

Replacements: Sean Cronin, Dave Kilcoyne, Andrew Porter, Ultan Dillane, Josh van der Flier, John Cooney, Joey Carbery, Jordan Larmour

Coach: Joe Schmidt (NZL)

Stage results

1. Julian Alaphilippe (FRA) Deceuninck-QuickStep  4:39:05

2. Michael Matthews (AUS) Team BikeExchange 0:00:08

3. Primoz Roglic (SLV) Jumbo-Visma same time 

4. Jack Haig (AUS) Bahrain Victorious s.t  

5. Wilco Kelderman (NED) Bora-Hansgrohe s.t  

6. Tadej Pogacar (SLV) UAE Team Emirates s.t 

7. David Gaudu (FRA) Groupama-FDJ s.t

8. Sergio Higuita Garcia (COL) EF Education-Nippo s.t     

9. Bauke Mollema (NED) Trek-Segafredo  s.t

10. Geraint Thomas (GBR) Ineos Grenadiers s.t

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A timeline of the Historical Dictionary of the Arabic Language
  • 2018: Formal work begins
  • November 2021: First 17 volumes launched 
  • November 2022: Additional 19 volumes released
  • October 2023: Another 31 volumes released
  • November 2024: All 127 volumes completed
UAE currency: the story behind the money in your pockets

Starring: Jamie Foxx, Angela Bassett, Tina Fey

Directed by: Pete Doctor

Rating: 4 stars

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FIGHT CARD

 

1.           Featherweight 66kg

Ben Lucas (AUS) v Ibrahim Kendil (EGY)

2.           Lightweight 70kg

Mohammed Kareem Aljnan (SYR) v Alphonse Besala (CMR)

3.           Welterweight 77kg

Marcos Costa (BRA) v Abdelhakim Wahid (MAR)

4.           Lightweight 70kg

Omar Ramadan (EGY) v Abdimitalipov Atabek (KGZ)

5.           Featherweight 66kg

Ahmed Al Darmaki (UAE) v Kagimu Kigga (UGA)

6.           Catchweight 85kg

Ibrahim El Sawi (EGY) v Iuri Fraga (BRA)

7.           Featherweight 66kg

Yousef Al Husani (UAE) v Mohamed Allam (EGY)

8.           Catchweight 73kg

Mostafa Radi (PAL) v Abdipatta Abdizhali (KGZ)

9.           Featherweight 66kg

Jaures Dea (CMR) v Andre Pinheiro (BRA)

10.         Catchweight 90kg

Tarek Suleiman (SYR) v Juscelino Ferreira (BRA)

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Engine: Long-range single or dual motor with 200kW or 400kW battery
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Business Insights
  • Canada and Mexico are significant energy suppliers to the US, providing the majority of oil and natural gas imports
  • The introduction of tariffs could hinder the US's clean energy initiatives by raising input costs for materials like nickel
  • US domestic suppliers might benefit from higher prices, but overall oil consumption is expected to decrease due to elevated costs
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
MATCH INFO

Uefa Nations League

League A, Group 4
Spain v England, 10.45pm (UAE)

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Zakat definitions

Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.

Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.

Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.

Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.

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