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Broken Bridges

For entrepreneurs, the real trade barriers lie close to home.

This story appears in the January 2007 issue of Entrepreneur. Subscribe »

This past summer, as the world focused on war in the Middle East, a potentially larger news event slipped under the radar: The latest round of global trade talks collapsed. Major companies responded almost immediately, with the International Chamber of Commerce pleading with negotiators to revive the talks. Yet few small-business organizations protested the talks' breakdown, even though politicians on both the left and the right agree that globalization benefits small companies as well as large. In fact, the talks' collapse raised an important question normally ignored in Congress and the mainstream media: Do entrepreneurs really benefit from freer trade?

Classical economic theory suggests free trade always eventually creates prosperity, since it allows each side to maximize its comparative advantage. But many entrepreneurs see no advantage in free trade. In one study of small and midsize manufacturers compiled by RSM McGladrey, a business consulting firm, 50 percent of respondents said they expected no revenue growth from selling globally.

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