The Case for Unilateral Free Trade

When one country puts up a barrier to foreign trade, its partners tend to return the favor. This is, to put it politely, a poor recipe for economic health. On page 360 of Lawrence White’s excellent book The Clash of Economic Ideas, he quotes Joan Robinson explaining why in one pithy sentence:

The logic of embracing free trade unilaterally, that is, no matter what policy any other national government adopts, is well expressed in an adage attributed to the economist Joan Robinson: Even if your trading partner dumps rocks into his harbor to obstruct arriving cargo ships, you do not make yourself better off by dumping rocks into your own harbor.

National governments tend to ask for a quid pro quo from their citizens’ trading partners before lowering tariffs and quotas and other nonsense. One understands the impulse; that is why it takes internationally negotiated agreements such as NAFTA to get anyone to dredge up said rocks. The point is that those rocks are a bad thing in and of themselves. Get rid of them, then. Even if you have to do it alone.

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