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Title: $Instruments and Uses of Trade Policy
Abstract: The trade models developed in earlier chapters illustrated two basic propositions. Under competitive conditions, free trade can maximize the value of global output. Furthermore, it is beneficial to each trading country. It relaxes the constraints imposed by a country's endowment of labor, capital, and natural resources, permitting households to consume better collections of goods than the country can produce on its own. Look around the world, however, and you will find that all countries use import tariffs, and many use other trade barriers as well. In most countries, moreover, important economic and political groups want even more protection from foreign competition. Is something wrong with the case for free trade?