Saturday, July 28, 2007

Mitt Says Partially Free Trade Lifts Poor Nations

Presidential hopeful Mitt Romney cited the need for "partially" free trade to lift Central and South American nations from poverty. His proposals don't include America's subsidized agricultural products. CNN reported:

"Free trade is key to ending Latin American poverty, Republican presidential candidate Mitt Romney said Saturday while courting support from the Cuban-American and growing Venezuelan-American communities. “Trade lifts all nations that participate,” Romney said when asked how he would end poverty and other conditions that have given rise to leaders such as Venezuela’s president, Hugo Chavez, who has been a close ally of Cuba’s Fidel Castro."

Is Mitt's assertion correct? Not according to Dr. Ann Harrison of the University of California at Berkeley. In her Wilson Center presentation she noted there is "no evidence of a significant link between trade and poverty." In another conclusion she cited trade combined with financial integration is associated with rising inequality in poor countries. Mr. Romney is well schooled in financial integration having been the CEO of private equity underwriter (PEU) Bain Capital. Could Mitt's free trade actually be the reason people turn to populist leaders?