Why Free Trade Agreements Should Address Labor Market Disparities
Free Trade Agreements (FTAs) fuel economic growth by cutting tariffs and opening markets, yet they miss a critical inefficiency: labor market disparities tied to racial or ethnic factors that sap productivity and growth. Trade isn’t just goods—it’s the workers powering innovation and supply chains. When hiring biases and wage gaps limit talent based on demographics, economies lose billions—up to 4% of GDP in advanced nations, per the IMF. FTAs, designed to maximize prosperity, can’t ignore this drag. Adjusting them to address these gaps could unlock significant gains in efficiency and output.
