The US as hapless island of Free Trade

How far from the global mainstream is the United States in terms of trade policy? Very far indeed. Although US media sometimes portray mercantilist economies in East Asia and elsewhere as "liberal" or "free trade" often by juxtaposing current policy against autarkic policies from two or three generations ago, it is the United States that stands almost alone as a major economy that imposes only nominal tariffs on imported goods.

 Haiti: The Second Most Open Economy in the Western Hemisphere

The reality that the US is an island of free trade in a global sea of mercantilism is apparent when one examines the data on average industrial and agricultural tariffs produced by the World Trade Organization (WTO). Below I've listed average tariffs for one hundred thirty six WTO member states (all of the independent nation states for which data are available). As you can see, the United States is tied with the former Soviet Republic of Georgia as the sixth most open economy in the world, and is the most liberal economy in the Western Hemisphere, beating out Haiti by a hair.





The EU ranks 44th most open; Japan ranks 68th; China ranks 74th and India is 125th most open. It should be noted that some seemingly free trade economies, such as Singapore and Mauritius, in fact heavily intervene in global currency markets to maintain undervalued currencies. This acts as a defacto import tariff and export subsidy. The US in contrast, has a severely overvalued currency, which acts as a subsidy to imports and a tax on US exports. Pioneering work on currency manipulation by the economists Joseph Gagnon and Harvard's Dani Rodrik will be discussed in a future post.(Gagnon and collaborator C. Fred Bergsten on December 25th 2012 posted a plan for reducing the extreme overvaluation of the dollar. Check it out here.The eight most extreme currency manipulators Bergsten and Gagnon identify are: "China, Denmark, Hong Kong, Korea, Malaysia, Singapore, Switzerland, and Taiwan". "Extreme" is their term of choice and not my editorializing.)

Rank	Country	Average Tariffs
1	Singapore	0.1
2	Mauritius	1.2
3	Brunei	1.5
4	New Zealand	1.8
5	Australia	2.55
6	Georgia	4
7	USA	4
8	Haiti	4.1
9	Armenia	4.5
10	Kuwait	4.95
11	Mongolia	5.05
12	Saudi Arabia	5.3
13	Afghanistan	5.65
14	UAE	5.75
15	Peru	5.8
16	Kyrygz Republic	5.95
17	Chile	6
18	Albania	6.2
19	Qatar	6.3
20	Bahrain	6.6
21	Ukraine	6.75
22	Palau	6.85
23	Myanmar	6.9
24	Canada	7.1
25	Moldova	7.2
26	Croatia	7.35
27	Guatemala	7.4
28	Montenegro	7.45
29	Indonesia	7.5
30	Honduras	7.65
31	Philippines	7.8
32	Nicaragua	7.9
33	Costa Rica	8.1
34	South Africa	8.2
35	Botswana	8.25
36	Lesotho	8.25
37	Namibia	8.25
38	Swaziland	8.25
39	Bosnia	8.35
40	Oman	8.45
41	Kazakhstan	8.55
42	Yemen	8.55
43	El Salvador	8.6
44	EU	8.75
45	Comoros	8.9
46	Papua New Guinea	8.9
47	Tajikistan	9.3
48	Antigua	9.5
49	Dominican Republic	9.5
50	Panama	9.8
51	Macedonia	9.9
52	Serbia	10.25
53	Paraguay	10.3
54	Uruguay	10.35
55	Malaysia	10.55
56	Taiwan	10.55
57	Israel	10.75
58	Cuba	10.8
59	Azerbaijan	10.85
60	St. Kitts	10.9
61	Bolivia	11.2
62	Cape Verde	11.2
63	Belarus	11.3
64	Russia	11.65
65	Argentina	11.65
66	Mozambique	11.65
67	Tonga	11.7
68	Japan	11.75
69	Burundi	11.8
70	Jamaica	11.9
71	Solomon Islands	11.9
72	Trinidad	12
73	Brazil	12.15
74	China	12.15
75	DR Congo	12.35
76	Nigeria	12.5
77	Guinea	12.85
78	Madagascar	12.95
79	Benin	13
80	Burkina Faso	13
81	Cote D'Ivoire	13
82	Guinea Bissau	13
83	Mali	13
84	Senegal	13
85	Togo	13
86	Grenada	13.05
87	Nepal	13.2
88	Nigeria	13.5
89	Venezuela	13.55
90	Jordan	13.8
91	Laos	13.85
92	Ecuador	14.25
93	Viet Nam	14.3
94	Colombia	14.3
95	Malawi	14.75
96	Ghana	14.85
97	Bermuda	15
98	Pakistan	15.25
99	Thailand	15.3
100	Iceland	15.45
101	Belize	15.5
102	Guyana	15.5
103	Uganda	15.65
104	Kenya	15.7
105	Tanzania	15.7
106	Cambodia	15.85
107	Bangladesh	15.95
108	Zambia	15.95
109	Mexico	16
110	Sri Lanka	17
111	Fiji	17.05
112	Rwanda	17.15
113	Uzbekistan	17.3
114	Syria	17.75
115	Djibouti	18.05
116	Gambia	18.15
117	Switzerland	19.4
118	Ethiopia	19.45
119	Gabon	19.45
120	Maldives	19.5
121	Central African Republic	19.55
122	Chad	19.55
123	Cameroon	19.7
124	Algeria	20.55
125	India	20.95
126	Vanuatu	21.6
127	Norway	21.85
128	Turkey	23.85
129	Sudan	25.2
130	Zimbabwe	25.45
131	Iran	27.25
132	Korea	27.6
133	Morocco	28.25
134	Tunisia	29.75
135	Bahamas	30.45
136	Egypt	39.95