Destroying trade gains through protectionism

The benefits of free trade are based on the classic comparative advantage trade theory, as originally espoused by the English economist David Ricardo in the early 19th century. Consumers, producers and economic growth all benefit on average from free trade. The winners from free trade outweigh the losers. Without making interpersonal comparisons, the logic of other economists was that the losers from free trade would be subsidised at the expense of the winners and that there would still be gains left over. Such a scheme is superficial on its face and not very practical. The benefits of trade account to everyone – importers, exporters, consumers and producers of all trading nations. The consumption of foreign-made, more economically produced products make everyone – consumers and producers – better off. Each and every impediment to trade, irrespective of which country imposes the impediment, hurts both exporting and importing countries. The benefits of trade are best measured as total trade – exports minus imports.