To Trade or Not to Trade

1
To Trade or Not to Trade?
2
Trade Is Good

• Everything has a cost opportunity cost
• Produce one good, cannot use the resources to
  produce something else
• Specializing production in goods with comparative
  advantage and trading for goods others produce at
  a lower relative cost
• More goods produced OR
• Fewer resources used to produce existing goods

3
Trade Has Costs

• Workers are unemployed and firms go out of
  business in the short term
• Our critical industries may not be developed
• Non-economic concerns
• Environment
• Human rights
• Infant industries
• Essential goods
• Tariffs, quotas, voluntary restraints
• Create trade barriers
• Can reduce short term costs or concerns about
  trade

4
And the Answer Is.

• You decide
• Are the short term costs or concerns about trade
  worth the long term benefits of economic
  efficiency?