NEXT STEPS IN THE FIGHT FOR FREE TRADE.

• Author: De Rugy, Veronique
• Position: ECONOMICS

SUPPORT FOR PROTECTIONISM and its ugly sister, "fair trade," is sweeping the globe yet again. President Donald Trump's actions in the White House have made it painfully obvious that, despite a strong consensus in favor of trade among academic economists, efforts to build support among the general public have largely been unsuccessful. There remains a profound misunderstanding about the benefits of a free flow of goods and the conditions under which these benefits materialize.

First, let's tackle the mistaken view that international trade is an arena of "win or lose" competition between nations. Explaining this mistake is the central objective of economist Paul Krugman's excellent 1996 book, Pop Internationalism. In the introduction, he describes being at an event in Little Rock, Arkansas, at which then-Apple CEO John Sculley described "a world in which nations, like corporations, are engaged in fierce competition for global markets." The description was met with "obvious approval from the audience, including Bill Clinton."

Sadly, as Krugman explains, the angst over foreign competition is only more acute when paired with geographic disparities in wages: People worry about the pool of workers in poorer countries who are willing to do jobs for much less pay. However, the idea that fast-developing low-wage countries are a threat to developed nations is "questionable in theory and flatly rejected by the data," Krugman writes. The truth is that no nation with which we trade--be that nation rich, poor, growing, or stagnant--is an economic threat to us. The opposite is true, in fact: Trade increases our prosperity. This happy fact also holds for our trade with China, whose growth we should welcome, as it will also enrich us.

Second, too few people understand that the economic reasons to support free trade--that is, getting rid of all trade barriers, including tariffs--do not depend on what other countries do. The case for free trade is a case for unilateral disarmament. Period. No buts. No conditions. There's no requirement for reciprocity, because the burdens of protectionist policies always fall first and foremost on the people in the country practicing protectionism. Consumers, not producers or exporters, bear the cost of the extra tax. It would be great for all governments to pursue the same policy of free trade, but it makes no sense to punish Americans with tariffs in order to convince foreign governments to stop punishing their citizens with...