Experts hail it, the vast majority of people benefit from it, and yet it's nowhere to be found.  Free trade, which refers to the unrestricted flow of goods into a country, is not simply something that would be nice to have.  Without it we've suffered through wars, depressions, and permanent loss of liberty.  When we've come closest to having it, we've enjoyed relative peace and prosperity.

It's a cinch to get.  All government has to do is unilaterally repeal all import restrictions.  No more tariffs, quotas, or domestic-content requirements.  No more "voluntary" agreements in which foreign companies are intimidated into self-imposed quotas or prices for fear of government sanctions.  Let the goods flow.

Free trade is the enemy of special interests that run to the government for protection.  These groups throttle us with harmful legislation because of largely unchallenged propaganda.  Let's dissect some of their claims:

1.  Trade agreements such as NAFTA and WTO promote free trade.

Trade agreements as such are meaningless.  Any country serious about free trade will commit to it unilaterally because they know import restrictions harm the overall domestic economy.  The Bush administration pays lip service to WTO and free trade, then imposes restrictions to shore up political support.  So far this year they've threatened to slap steep fines on Canadian softwood lumber and steel imports, and have declared that Vietnamese catfish aren't really catfish, since they take market share away from constituents in the Mississippi delta.  [1]  Disregarding the WTO, the European Union has threatened retaliatory tariffs targeted at some of Bush's politically-favored states.   

Given the political nature of the WTO, the spectacle of leftist protesters trying to hinder trade negotiations is somewhat amusing, in that they believe they are fighting global laissez-faire.  The "WTO isn't mainly about trade," according to a writer for the Environmental Research Foundation (ERF).  "It is mainly about establishing the kind of economy, worldwide, in which the owning class gets to make all important decisions without interference from governments or from anyone else." [2]

Under laissez-faire, the "owning class"--meaning the producers of goods and services--are at the mercy of consumers, through their decisions to buy or not to buy.  The ERF promotes this state of affairs as the ultimate horror and believes, quite naively, that the WTO is working to bring it about.    

2.  Free trade threatens domestic jobs.

Creating jobs has never been a problem in any economy.  Creating productive jobs is the challenge.  Free trade encourages the creation of wealth, which means it will destroy some jobs and create new ones, as guided by consumers' choices.  Since tariffs insulate domestic firms from competition, the protection keeps some people stagnating in outmoded jobs, thereby discouraging them from seeking more favorable employment in competitive industries.

However, Paul Craig Roberts has identified a trade situation that is fast becoming a problem.  He notes that multinational corporations have established factories in underdeveloped countries like Mexico and China and use the low-cost labor of those nations to produce goods for sale in the U.S.  And not just unskilled labor, but engineers and researchers trained here but hired in those countries at one-third the salary.  "When these facts are mentioned," Roberts says, "free-traders have a knee-jerk reaction and rush to the defense of free trade." [3]  He's even asserted that the "end result of the job transfers will be a U.S. population too poor to purchase the products produced by cheap Chinese and Mexican labor." [4]

A policy of free trade with other nations will not guarantee a country's prosperity.  How government treats domestic commerce plays a major role in business decisions.  From the "law factory" in D.C. to the business-hating culture in Hollywood, America has subverted business with crippling regulation and unearned guilt.  Given that companies are always searching for more profitable ways of doing business, is it any wonder many of them are moving operations out of the country?

If we are to stop this "desertion," as Roberts calls it, we need to repeal laws that drive business away.  Unfortunately, if Congress ever addresses the problem, we can expect them to have a knee-jerk reaction and make matters worse.  

3.  It is better to export than to import.

When goods and services are exported, they leave the country.  Therefore, less is available for consumption at home.  When imports arrive, we have more choices, and because they compete with goods from other countries, including our own, we have better choices--higher quality, lower prices.  As Milton and Rose Friedman explained, the "favorable balance of trade" that is so universally sought after really means "sending abroad goods of greater total value than the goods we get from abroad." [5]  

Look at it this way: each person's own specialized labor is "exported" to get the imports (goods) he didn't produce.  Most of us would prefer to get more for less rather than the other way around.  So it is with exports and imports between countries.

4.  "Fair Trade," not free trade, promotes world peace through justice.

"Fair trade" means protectionism.  As Frederic Bastiat pointed out, protectionists want to do to their country during peacetime what they try to do to their enemies during war--close its borders to imports.  Protectionism promotes conflict between nations.  When President Hoover went against the advice of over 1,000 economists and signed the Smoot-Hawley Act in 1930, boosting some tariffs to 100% levels, other countries retaliated in kind and brought world trade to its knees.  [6]  This contributed to our collapse into a depression, where we stayed until World War II.  Only free trade is fair, because it does not cater to special interests.

5.  Free trade invites "dumping" of goods, which harms the domestic economy.

Wouldn't you love General Motors to "dump" a new Corvette in your driveway for free?  In international trade, when goods are "dumped," it means they're sold here at prices below those in the country of origin.  Who benefits?  The American consumer, because he gets them at a lower price.  Any company that slashes its prices below that of its competitors could be accused of "dumping," but most people would benefit from it.

Anything other than free trade is an attack on property rights.  Without property rights, no rights are possible, and we end up at the mercy of the State.

References

1.  Bush plays free-trade game, USA Today, http://www.usatoday.com/money/world/2002-05-02-trade-war.htm

2.  Making Sense Out of the WTO, Environmental Research Foundation, http://www.rachel.org/bulletin/bulletin.cfm?Issue_ID=1657

3.  Smug in a no-think existence, Paul Craig Roberts, http://www.townhall.com/columnists/paulcraigroberts/pcr20020425.shtml

4.  Worsening Job Prospects for White Males, Paul Craig Roberts, http://www.townhall.com/columnists/paulcraigroberts/pcr20020327.shtml

5.  The Case for Free Trade, Milton Friedman and Rose Friedman, 1997, http://www-hoover.stanford.edu/publications/digest/974/friedman.html

6.  Free Trade or Protectionism, Vincent H. Miller and James R. Elwood, http://www.isil.org/resources/lit/free-trade-protectionism.html