The most principled case for free trade is a moral one: voluntary economic exchange is inherently fair, benefits both parties, and allocates scarce resources more efficiently than a system under which government dictates or limits choices. Moreover, government intervention in voluntary economic exchange on behalf of some citizens necessarily comes at the expense of others and is inherently unfair and inefficient, and subverts the rule of law.

Trade barriers are the result of productive resources being diverted to achieve political ends and, in the process, taxing unsuspecting consumers to line the pockets of the special interests that succeed in enlisting the weight of the government on their side. At their core, trade barriers are the triumph of coercion and politics over free choice and economics.

When people are free to buy from, sell to, and invest with one another as they choose, they can achieve far more than when governments attempt to control their decisions. Widening the circle of people with whom we transact brings benefits to consumers in the form of lower prices, greater variety, and better quality, and it allows companies to reap the benefits of innovation, specialization, and economies of scale that larger markets afford. Free markets are essential to prosperity, and expanding free markets as much as possible enhances that prosperity.

On this page you will find Cato’s appeals to first principles: arguments for free trade that ignore the political constraints and that go beyond discussion of the affirmative net economic benefits of trade liberalization to include discussions of individual rights and morality.

More on Trade Theory, Philosophy, and Morality

Commentary

Lincoln Was Wrong on Trade

By Daniel R. Pearson. The Hill (Online). March 1, 2017.

Econ 101 for Presidential Candidates

By Daniel R. Pearson. The Detroit News. September 29, 2016.

The World Has Changed. Why Haven’t Our Trade Deals?

By Simon Lester. Washington Post. September 14, 2016.

Cato Studies

Should Free Traders Support the Trans- Pacific Partnership? An Assessment of America’s Largest Preferential Trade Agreement

By Daniel J. Ikenson, Simon Lester, Scott Lincicome, Daniel R. Pearson, & K. William Watson. Working Paper No. 39. September 12, 2016.

Retail Globalization and Household Welfare: Evidence from Mexico

By David Atkin, Benjamin Faber, and Marco Gonzalez-Navarro. Research Briefs in Economic Policy No. 30. July 15, 2015.

As Promised, Free Trade Agreements Deliver More Trade: Manufacturing Exports Receive an Extra Boost

By Daniel Griswold. Free Trade Bulletin No. 45. June 7, 2011.

Articles

Rethinking the International Investment Law System

Simon Lester. Journal of World Trade. Vol. 49. No. 2. 2015.

Finding the Boundaries of International Economic Law

Simon Lester. Journal of International Economic Law. Vol. 17. No. 1. February 24, 2014.

Yes, McKinnon Is Right, Again

Steve H. Hanke. The International Economy. Spring 2013.

Public Filings

Perspectives on the Export-Import Bank of the United States

By Daniel J. Ikenson. Testimony. June 2, 2015.

Trade Promotion Agencies and U.S. Foreign Policy

By Daniel J. Ikenson. Testimony. May 19, 2015.

Manufacturing in the USA: How U.S. Trade Policy Offshores Jobs

By Daniel J. Ikenson. Testimony. September 21, 2011.

Cato Reviews & Journals

Trade on Trial, Again

Daniel J. Ikenson. Policy Report. May/June 2016.

Are Imports a Drag on the Economy?

Pierre Lemieux. Regulation. Fall 2015.

U.S-Japanese Trade: Myths and Realities

Steve H. Hanke. Cato Journal. Winter 1984.