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To: curiosity
...and certainly not according to the vast majority of mainstream trade theorists.

I'm calling bullsh-t! Back that statement up with some evidence.

97 posted on 11/21/2004 4:43:51 PM PST by LowCountryJoe (Willie Green after a chemical attack would make an excellent selective unmasking candidate.)
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To: LowCountryJoe
I'm calling bullsh-t! Back that statement up with some evidence.

As you wish. I can see you are not familiar with the mainstream economic research in the field of trade. Over the last 25 years, there have been an enormous number of studies published in top-tier mainstream , peer-reviewed journals proving that there are circumstances under which free trade can hurt a country. Below is a partial reading list for you:

Bhattacharjea, A. 1995. "Strategic tariffs and endogenous market structures: trade and industrial policies under imperfect competition." Journal of Development Economics 36: 287-312.

Brander and Spencer, 1985. "Export subsidies and market share rivalry.." Journal of Internaltional Econmics 18: 83-p 100.

Eaton and Grossman, 1986. "Optimal trade and industrial policy under oligopoly." Quarterly Journal of Economics 101: 383-406.

Fuerst and Kim, 1997. "Two part trade policy under imperfect competition." Review of International Economics 5 : 63-71.

Grossman and Horn, 1988. "Infant industry protection reconsidered: the case of international barries to entry." Quarterly Journal of Economics 4: 767-787.

And, of course, there is the excellent new peer-reviewed book published by MIT press that points out two very plausible scenarios in which free trade can hurt a country like the US:

Gomery and Baumol, 2000. Global Trade and Conflicting National Interests. Cambridge MA: MIT Press.

You will see that the above are published by reputable, peer-reviewed mainstream outlets, and the authors have credientials beyond dispute.

So overwhelming is the evidence that free trade can sometimes hurt a country that no mainstream economist denies this fact. Even Columbia professor and free trade ideologue Jagdish Bhagwati admits it. He, and others like him, still support free trade because they believe that in practice governments are incapable of implementing the right mix of tarrif and industrial policies that would be superior to free trade.

Whether governments can succed in implementing policies superior to free trade is controversial, and reasonable people can disagree. I am agnostic on the question, and lean toward the view that some countries can and others cannot. However, there is absolutely no doubt that a policy other than free trade can be better for a particular country under some circumstances that are by no means uncommon.

131 posted on 11/22/2004 8:46:42 PM PST by curiosity
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