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Bastiat on Free Trade
From Frédéric Bastiat's (1801-1850) A Petition:
This is a wonderful, burning satire, and should be required reading for all people who are opposed to free trade because it hurts domestic producers. The conclusion:
I support unilateral free trade. There are many people who unfortunately insist on "fair" or "balanced" trade, requiring both trading partners to coordinate in opening their markets. (i.e., "We'll lower our tariffs if you lower your subsidies.") Allegedly this protects the freer nation from being exploited by the more protected one, but this view has it entirely backwards. In a condition of unilateral free trade, the freer country gains the dual benefits of cheaper imports (no tariffs) and avoids paying subsidies. When imports are made cheaper by the other nation's subsidies, the result is that much more fortunate for the freer nation — it makes the cost of those imports that much less. When the other nation's subsidies strengthen one of its industries, the cost weighs on all its others. (They make it more difficult for one domestic industry, but easier for all others.)
President Bush has made the double error of supporting both tariffs (steel) and subsidies (agriculture). But I sympathize with his circumstances — for political reasons he can't be seen taking advice from a Frenchman.
GMTA — The Usurer broadcasts his own message in support of unilateral free trade.
And given the opportunity to expand, I should note that in my parenthetical above I neglected to mention that subsidies don't just shuffle around the strengths of industries — they're actually a net loss to the country implementing them, both because they create malinvestment and because the benefit flows overseas.