The Truth About Trade

 On September 4th, EU Trade Commissioner Cecilia Malmstrom gave a speech entitled “The Truth about Trade” at the annual meeting of the European Union think tank Brugge Institute, suggesting that there are many sources of international trade. Inciting speech runs counter to the facts. Here are some of her speeches:
  ”In the age of our lives – instant messaging, fragmented information, and the era of Twitter governance – it may be difficult to hold the truth. As Mark Twain said: ‘The truth has not yet put on boots, lies I have traveled half the world.’
  ”The biggest misunderstanding I have seen about international trade is tariffs. First, those who advocate tariff barriers often believe that this behavior is against foreign companies, but in fact it is against domestic consumers. This is to protect the domestic industry by sacrificing broad social interests. Second, they often think that if the products are produced locally, they can save costs, enhance the economy, and create jobs. The idea is tempting, but it is not the case. The basic principle of trade is comparative advantage and specialization is more efficient. Putting aside this basic principle leads to unsustainable business models, increased daily spending for the average consumer, and a more fragile economic environment in the long run.
  “Another common misconception is the ‘deficiency deficit’, which believes that exports are profitable and imports are losses. This idea ignores economic realities. For example, the EU is increasingly becoming a service-oriented economy. Obtaining low-cost and reliable imports It is equally important to us.
  ”In fact, a trade surplus can be a bad sign. This suggests that domestic demand is weak, which in turn may make a country more vulnerable to global economic fluctuations. A balanced trade book is not a family budget. ”