A Weak Case for Free Trade
Today’s Wall Street Journal published one of the weakest cases for free trade it has ever published. The Journal, which is traditionally quite pro-free trade, published an op/ed by former Democratic congressman James Bacchus. In it, Bacchus talks up the benefits of trade for exporters. A sample paragraph:
Will Democrats approve the pending free-trade agreement with Colombia? American workers and businesses would certainly profit from the proposed tariff cuts in that agreement that would, according to the White House, result in $1 billion annually in new exports. Ninety percent of imported Colombian goods already enter the U.S. duty-free.
In context, Bacchus seems to be saying because most of our imports from Colombia are already duty-free, “we” don’t lose much from opening our borders to Colombian imports. Actually, if the U.S. had high tariffs on all Colombian imports, then the gain from free trade would even be greater. Nowhere in the article does Bacchus mention the other source of the benefits of free trade: the gains to consumers. The gains from trade are the producer surplus and the consumer surplus from trade. Bacchus exclusively mentions the former (not using that term, of course), but breathes not a word about the latter.