ABSTRACT
Since Adam Smith and David Ricardo, most economists have subscribed to the belief that trade liberalization benefits both trading partners because it lowers the cost of imports and competing domestic products; expands markets for exports, allowing producers to take advantage of scale economies; and allows workers to move from low-productivity industries to high-productivity export sectors. Based on these sorts of considerations, many studies have shown that the elimination of trade restraints has great benefits for home consumers and for overall national welfare. However, these studies have emphasized the beneficial impact of trade policy on consumers and ignored or neglected its effects on producers (especially workers and owners in import-competing industries). While lower prices for consumers are equated with the “national interest,” the goal of maintaining production and jobs in particular industries is disdained as catering to special interests.
