Advantages are enjoyed by disorganized majority,
costs are paid by organized and loud minority.
Look at US car industry. It makes worse cars than Japanese. So all of American who drive cars benefit from free trade.
But US car-makers and their workers would suffer. And since trade unions and campaing donations of automotive companies are important tools in election, politicians have been trying to protect US carmakers for so long.
It is ok to have temporary barriers to give domestic industry time to adapt, give workers time to re-train for new jobs. But temporary things tend to last a lot longer than intended.
2007-03-13 15:43:44
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answer #1
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answered by Anonymous
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Special interest groups.
Protection is a scheme conjured up by politicians to get votes. Barriers to trade are economically inefficient. They cause dead-weight losses through misallocation of resources.
Among such resources are human labor. It sucks to get laid off, it really does. There's nothing like busting your a$$ for a company one day and losing your job. Maybe the company outsourced. Maybe the company could no longer compete on the global market. The economy and the unemployment rate are always at the front of any election and unemployed people are unhappy voters. So what's do politicians care if there's a little economic efficiency if they can get more votes?
Same goes for any special interest group that donates money, services, etc.
2007-03-14 00:04:45
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answer #2
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answered by a_liberal_economist 3
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Free trade is almost always beneficial in total for the country. But the beneficiaries tend to be 'everyone' as consumers and firms with growth prospects, which are harder to pin down in advance. On the other hand, the losers - inefficient domestic producers - lobby hard for protection.
2007-03-13 23:59:42
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answer #3
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answered by kheserthorpe 7
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Political demagoguery gets votes. That's really about it.
And let's face it. People hate freedom and love big government "protecting" them from the bogeyman. Free trade is nothing more than freedom.
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2007-03-14 00:09:00
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answer #4
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answered by Zak 5
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Rich countries love "free trade" cuz it's good for them. When Britain was the premier economic power, it pushed free trade on other countries, but the others, such as especially the US, resisted it. When the US became the premier economic power, it pushed free trade on other countries, many of which resist it, just as we used to do.
2007-03-13 23:24:18
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answer #5
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answered by mcd 4
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