Bonus Quotation of the Day…

by Don Boudreaux on July 13, 2018

in Balance of Payments, Myths and Fallacies, Trade

… is from Simon Lester’s July 12, 2018, blog post at Cato@Liberty, titled “Trade Deficit Confusion Is Bipartisan”:

The notion that a trade deal should lead to “balanced trade” seems like it comes from a Cuba-Venezuela trade arrangement, in which oil is traded for doctors. In the free market world of trade agreements, by contrast, the parties agree not to a barter of goods and services, but rather to remove tariffs and other protectionist barriers. The resulting bilateral trade balance is something to be determined by the market. The new trade flows are probably worth studying for various academic reasons, but are not a measure of success or failure of the deal.

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