What criticism does Columbia’s Jagdish Bhagwati make regarding U.S. administrations' understanding of free trade?

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They fail to differentiate between the advantages of free trade and the risks posed by unrestricted capital flows in less developed countries with weak financial systems.They confuse the benefits of free trade with the problems caused by trade deficits.They overlook the relationship between external openness and income growth among the poorest 40% of less developed countries.They ignore the influence of multinational corporations and how this affects income distribution.They underestimate the role of tariffs in protecting domestic industries.

Explanation

Jagdish Bhagwati points out that U.S. administrations often do not distinguish between the positive effects of free trade and the potential dangers of free capital movements, especially in less developed countries that have fragile financial institutions. This confusion can lead to misguided policies that fail to protect vulnerable economies.