This was originally posted on PoodleRose on August 21, 2013. Comments have not been migrated.
Representatives from twelve countries will meet later this week to negotiate a trade agreement as a part of the Trans-Pacific Partnership. Many of the countries involved want increased access to markets in other participating nations. For example, Americans want to be able to export more rice to Japan, while Australians want to export more sugar to America.
At issue are tariffs and other restrictions that make imports more expensive than domestic products. As an example, Japan imposes a tariff of 778 percent on imported rice, and America essentially limits sugar imports from Australia to 89,000 tons per year. The stated purpose of these trade restrictions is to protect domestic industries from foreign competition. Each nation wants to protect some of its industries while demanding that other nations remove such protections for their own industries.
The proper solution is to get rid of all restrictions to trade. If Australians can produce sugar less expensively than American farmers, American consumers and Australian farmers benefit. If Americans can grow rice less expensively than their Japanese counterparts, then Japanese consumers and American farmers benefit.
The only parties harmed by free trade are those who are less efficient than their competitors. Indeed, the purpose of protectionism is to shield the inefficient. In the end, this harms everyone, because more resources are used to create the same products.