New ideas about the future of US trade policy have been on the table for many years. Economists are constantly thinking of how to better balance the market to make trading beneficial to all. And in a world, where over half the market is controlled by less than ten countries, a level playing field is in demand and most importantly, fair. Too many countries are being exploited for cheap labor and materials at our expense. So how do you level the field while benefiting everyone at the same time? Most would argue for free and fair trade - a combination that "creates jobs and raises living standards for American workers.”
So why would one argue that free trade is the best policy? For starters, it increases efficiency, competition, and variety available for consumption. This is mainly due to the absence of tariffs and trade barriers that complicate and slow down the market. Free trade also yields the consumption and production effects. With the consumption effect, countries are given the opportunity to trade at different prices; likewise, the production effect illustrates how trade is making you more efficient in the context of international trade. After all, gains from trade are analogous with technological progress.
Another way to look at the advantages of free trade is to look at the disadvantages of protectionism. Tariffs and quotas are basically just "blunt” policy tools that have several, better alternatives. Moreover, protection introduces a high possibility of mutual loss.
Politics is a huge factor, possibly even the determining factor in the rise and fall of free trade. It is the root of motivation for some regimes to design their economic policy after free trade in an effort to last longer and to encourage more comprehensive adherence to rules. Perhaps the most sensible way to do this is through the hegemonic stability theory. Free trade regimes are most stable and strongest when the system has a hegemonic distrib...