of august 9, 2004, by product group. ” u. s. general accounting office ( 1993 ), “ sugar program : changing domestic and international conditions require program changes, ” gao / rced - 93 - 84 ( washington : gao, april ). these payouts has been extremely skewed : for fiscal year 2003, a single firm received more than onefourth of the $ 190 million in countervailing and antidumping duties that were distributed to u. s. firms. 26 import quotas ( as opposed to tariffs ) raise a third concern about trade protection. by restricting the supply of certain types of imports within the united states, quotas may benefit those foreign producers who retain the right to sell to u. s. markets by raising the prices of their goods. for example, one study found that, of the $ 8. 6 billion in net welfare costs induced by the multi - fiber agreement, which restricts textile and apparel imports, about $ 6 billion accrued to those foreign producers who were allotted shares of the import quotas. 27 surely, many americans would cease to support certain types of import protections if they knew that such actions were serving to prop up the profits of foreign producers. finally, we must not forget that trade actions, while sometimes protecting some american workers in import - competing industries, often invite the threat of foreign retaliation that would hurt american workers in export industries. for example, after the imposition of steel safeguard duties in march 2002, eight of our trading partners initiated safeguard investigations of their own on steel imports. given the importance of export markets to the most dynamic areas of u. s. manufacturing, we cannot afford to jeopardize them by inviting foreign barriers to our products. conclusion in conclusion, i think it unlikely that we will see a marked global reversal of trade liberalization on the order of the restrictions enacted in the 1930s. policymakers have generally learned the lessons of that destructive episode. nevertheless, it is not inconceivable that progress in dismantling trade barriers could stall. many of the easiest negotiations - such as on lowering tariffs - have already taken place. more ambitious and intrusive trade liberalizations, which often involve dismantling barriers to internal competition or cherished systems of domestic subsidies, may not have the necessary public support. it is also possible that a multiplicity of narrow, targeted trade actions - such as antidumping or safeguard actions - could lead to a de facto rollback

roger w ferguson, jr : free trade - what do economists really know? remarks by mr roger w ferguson, jr, vice chairman of the board of governors of the us federal reserve system, at the conference on trade and the future of american workers, washington, dc, 7 october 2004. * * * the role of trade in the u. s. economy has moved well into the spotlight in recent years, and i am pleased to be here today to share my thoughts on this important topic with such distinguished and knowledgeable colleagues. over the course of this day, you will be hearing from leading analysts, policymakers, and commentators about recent developments in the u. s. economy, past and prospective trends in job creation, the role of sourcing ( both out - and in - ), and the implications of trade for the coming elections. in my remarks this morning, i would like to put these issues into the broader context of the debate over free trade and its implications for the american economy. though my focus will be on free trade, we must remember that prospects for the average american depend on many other factors as well, including technological progress, the education required to exploit this progress, a dynamic market - oriented economy, a framework of limited but effective regulation, healthy and well - governed financial institutions, and a stable macroeconomic environment. and free trade is not necessarily the most important item on this list. even so, it has been a focus of interest and aspiration for economists dating back to adam smith and david ricardo. as you know, finding overwhelming agreement on issues is difficult among economists, but free trade is an exception. 1 the supporters of free trade have not been ignored. in the past half - century, global trade has become freer and has expanded rapidly. the ratio of trade ( exports plus imports ) to worldwide gross domestic product rose from only 16 percent in 1960 to 40 percent by 2001. in 1960, the united states, germany, and japan had average tariff rates of around 7 percent ; these rates were more than halved by 1993. the number of members of the world trade organization ( wto ), or its predecessor, the general agreement on tariffs and trade, rose from 18 in 1948 to 146 in 2003, and the number of regional trade agreements in the world ballooned from only 1 in 1958 to 161 in 2003. although most economists welcome these trends, the public at large has been much more ambivalent about international trade. attitudes toward free trade in principle remain