Excellent article. Indiscriminate trade is also reckless because:

* Can we trust China to become a superpower? Apparently not, according to our own Defence White Paper. We have to spend big arming ourselves for potentional conflict, not to mention the existing cyber war. Ergo, Chinese goods are not cheap, and we are insane to make China rich with our trade. We should find an alternative source of manufactured goods or make them ourselves.

* The ravages of global supply and demand makes it a very unstable environment e.g. the mad demand for minerals is sucking the life out of our manufacturing industry through a high exchange rate.
We need an economics that values more than just the price of goods. It must value existing communities rather than sacrifice them to the whim of the invisible hand, and it must generate the type of work we want to do (do we all want to work down a mine?).

Who will capture the protectionist vote? Perhaps the new APP (Australian Protectionist Party):
http://www.protectionist.net/

Here's another good article, by Steve Barber:
http://australianconservative.com/2011/01/we-must-re-industrialise-our-economy/

As sure as night follows day, protectionism will return. Let's hope it's sooner rather than later.

The "religious zeal" comes from the combined emotional sedative of simplicity and passivity. Such intellectual prostration was demonstrated by Julia Gillard in her recent statement: "There is a simple equation at work here: trade equals growth, equals jobs".

Actually, there's no simple equation, just a simple Prime Minister with no two brain cells to connect together.

Of Gilbert’s five points, only the first - the transition costs of economic change – is valid.

It is extremely simple to factor costs such as transport into comparative advantage calculations, and it no way undermines the substance of the theory.

It’s true that Ricardo’s theory assumed that capital is immobile. But much trade theory in the past 50 years has relaxed this assumption and also taken into account a range of other effects of trade – competition, technology transfer, economies of scale, productivity differences, labour mobility etc. The results are more complex but by and large they point the same way – societies gain from freer trade:

http://www.wto.org/english/res_e/booksp_e/anrep_e/wtr08-2c_e.pdf

Free trade may well encourage large-scale production processes, and indeed economies of scale can be another source of gains through trade. But large-scale production processes do not necessarily concentrate wealth. Most readers of this site probably have indirect ownership through superannuation of companies like Telstra, Ford, Microsoft, BHP etc. Very few of us will be business owners in our own right.

Free trade does not generate a “race to the bottom”. This is the most persistent fallacy about free trade, the “pauper labour” fallacy. Rich countries can compete with poor countries where labour is cheap because in rich countries productivity is higher – that’s why they are rich.

Paul Krugman wrote an excellent article on the persistence of ideas such as those in this article – it’s still well worth a read:

http://web.mit.edu/krugman/www/ricardo.htm

We should be talking about fair trade, not free to rape trade.The cuurent labour rate in Vietnam is 30c per hr.The other issue is all the pollution caused by low grade bunker oil of our 80,000 commercial ships.They are many times more pollutive than all the motor vehicles on the planet.

We need to get back to domestic production and consumption.Many of the products coming from China are inferior and end up in land fill.Why not produce a product like a car, house,furniture,that has longevity and quality.You'll pay a bit more but it saves on energy and resources.

Completely forgotten here is that one company's protective tariff
becomes a higher input cost for another company, making them
less competitive in the global market.

We've tried all this before in Australia and it was a dismal
failure. Just read Keating's latest book, its available from
Amazon as an ebook download, much cheaper. Oops, there is me,
benefitting from free trade again and even saving a tree or
two in paper and energy as well.

How can one have free trade with a centrally controlled economy like China? You can be sure that if at any time China perceives that national or local interests are at risk then bureaucratic obstruction will occur. In Japan the nationalistic ethos of favouring their own and the old boy betwork serves the same purpose.

*Many of the products coming from China are inferior and end up in land fill.Why not produce a product like a car, house,furniture,that has longevity and quality*

Take a look at the numbers, Arjay. Only 25% of our imports come
from China. 75% come from elsewhere, including Europe, Japan, Korea,
USA etc, hardly low wage countries.

From Miele kitchen appliances, Thermomix - 2000$ French kitchen gadgets,
Mercedes and BMW cars, Boeing and Airbus planes, high
priced US drugs, medical equipment from Japan and elsewhere, we
import them all. All based on quality, not price.

Meantime the value of China cannot be underestimated. Before
they became manufacturers, we sold our iron ore for a few $ a tonne,
the price has quadrupled. They buy 30'000 tonnes of lamb a year,
compared to zilch. The list goes on.

All of us are consumers and all of us benefit from trade.