The Economist blog today has a great post on the benefits of global free trade.

The post lauds European Union Trade Commissioner Peter Mandelson for his tireless fight for liberalism and openness, pointing out that most European “free market liberals are so scared of being thought mean or uncaring that they retreat into a corner, hugging their rationality to themselves.”

It’s very true.

A lot of Europeans will tell you that free trade leads to local producers in developing countries being forced out of the market and therefore mass unemployment, the loss of food self-sufficiency, and social upheaval in the developing world.  Consequently, anybody advocating open markets must be a heartless communitarian driven solely by the desire to increase the wealth of Western companies, no matter how high the cost for the developing world.

While this narrative is popular, it has little to do with reality.  As Mr. Mandelson points out in a speech to be given at the University of Cambridge tonight, “

[d]eveloping countries now account for a third of all global trade. By opening their economies to investment, focusing on state-directed export growth and producing goods for western markets the economies of Asia and Latin America have leveraged the fastest economic growth and the steepest reduction in poverty the world has ever seen. Measured objectively, in the last twenty years the EU’s single biggest contribution to global poverty reduction has little to do with development aid and debt relief. It is the openness of our markets.”

Of course, Europeans’ negative reaction to the prospect of reduced trade barriers also has to do with the fear of losing our own prosperity. Mr. Mandelson correctly observes that “[m]any Europeans intuitively believe that a world in which China and India achieve export superpower status must be a world in which Europe’s own measure of prosperity is proportionately reduced.”

This scenario instills fear in Europeans and is routinely evoked by protectionist politicians to undermine the free trade agenda.

In truth, as Mr. Mandelson oberserves, the “European economy has had a net job creation rate for the last ten years of eighteen million jobs, despite steady increases in productivity and increased trade competition.”

Moreover, as ACT Research Counsel Braden Cox and Vice President for Public Policy Steve DelBianco point out in a paper entitled National Policies as Platforms for Innovation, market-based international trade is one of the policies that are critical to creating a better ecosystem for innovative companies.

So, Mr. Mandelson, please keep on fighting the good fight – we will all be better off if we don’t give in to the protectionist impulses that can be found in so many European countries (and in the US) right now.