How to project free trade as a great idea?

Miscellaneous General
1

Lets reasonably assume, as it is in reality, that people are fans of economic autarky. People don’t like to see their fellow country-men losing jobs and settling for relatively lower paying jobs, after the influx of foreign competition, either as increased supplies(which sends domestic prices below the cost of production of domestic firms, thereby making them go out of business) or more cost-effective methods of production in foreign countries(which has almost the same implications–production could be carried on much larger scale before profits get wiped out with decreasing prices).

I’ve also seen protectionists argue that free trade would make products which are cheap in the indigenous country to get expensive, as the produce gets exported to foreign countries where prices that these produce could command are higher. This costs domestic prices to rise.

So, how would you give a proper rebuttal to these arguments? What would you project as the advantages of free trade?

P.S: Lets move beyond the argument that people trade only when they find it beneficial. Protectionists agree to it, but they are more concerned with the side-effects of international competition and price arbitrage(in the case that it increases domestic prices that is).

2

  1. It’s discrimination against people abroad. Generally, people abroad are worse off than people in the West. Interventionists talk a lot about poor people in Africa and how foreign aid needs to be sent. Well, they can’t have it both ways: raising trade barriers keeps those people poor. Incidentally, sending foreign aid to foreign governments also keeps them poor.

  2. Foreign competition lowers prices of goods and services. We’re in an economic depression. What better to help us then lower prices? This already happens of course. Most of our consumer products come from abroad. Raising trade barriers just makes everyone poorer, except those producers that are temporarily shielded from competition.

  3. Combining point 1 & 2. We have free trade within states. Is there some kind of problem with trading with someone from the other side of the country? Does your neighbor deserve a job more than a guy at the end of the street?

  4. Maybe those people should deserve the job that actually provide it the best and the cheapest.

3

It’s simple: protectionism leads to lower living standards.

First, when it comes to consumer goods, tariffs and quotas raise the prices that consumers have to pay. This means that consumers have less money to save, invest, and spend on other goods.

Second, when it comes to producer goods, tariffs and quotas raise the prices that businesses have to pay. This means that domestic businesses are less profitable precisely because of “protectionism.”

Example: Steel tariffs imposed by Bush have helped drive the Big Three auto producers into bankruptcy. Clearly, these tariffs have hurt the American economy, as American businesses which rely on steel have lower profit margins as a result. This forces American businesses to raise prices for the goods and services they produce, which in turn hurts the American consumer.