DP3707 Departure from Free Trade: A Survey

Author(s): Arye L. Hillman
Publication Date: January 2003
Keyword(s): free trade, political interests, protection, public interest, special interests, strategic trade policy
JEL(s): F13
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3707

This Paper surveys the ways in which departures from free trade have been treated in economic analysis. Normative theories linked to classical arguments have shown how departure from free trade can enhance efficiency and increase social welfare. Positive perspectives with links to political-economy premises of public choice view departure from free trade as socially undesirable and consider why governments nonetheless at times choose not to adhere to free trade. In the first case, models propose how choosing to depart from free trade can be in the public interest. In the second case, decisions by government to depart from free trade are viewed as compromising the public interest. The distinctions provide the basis for an interpretive path through the literature on international trade policy.