“We need to get this bill passed. We need to pass it for the American workers who want good, high‐paying jobs. We need to pass it for our farmers, ranchers, manufacturers, and entrepreneurs who need access to foreign markets in order to compete.”
Hatch is as confused as most Washingtonians about the actual case for free trade.
This whole “exports and jobs” framework is misguided. In the Cato Journal, economist Ronald Krieger explained the difference between the economist’s and the non-economist’s views of trade. The economist believes that “the purpose of economic activity is to enhance the wellbeing of individual consumers and households.” And that “imports are the benefit for which exports are the cost.” Imports are the things we want—clothing, televisions, cars, software, ideas—and exports are what we have to trade in order to get them.
And thus: “The objective of foreign trade is therefore to get goods on advantageous terms.” That is why we want free—or at least freer—trade: to remove the impediments that prevent people from finding the best ways to satisfy their wants. Free trade allows us to benefit from the division of labor, specialization, comparative advantage, and economies of scale.