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Notes -
The arguments in favour of free trade are convincing, but I've always wondered why we don't see unilateral free trade. After all, if you take at face value the arguments that tariffs on foreign imports hurt domestic consumers more than they benefit domestic producers, it would make sense to completely remove foreign tariffs without waiting for trading partners to do the same.
There are two explanations I can think of:
Unilateral free trade is good, but multilateral free trade is better. Having tariffs gives governments the option of removing them in exchange for foreign countries doing the same. Without tariffs, governments have no leverage.
Politics. Domestic consumers are better at lobbying governments than consumers, since the benefits of lower tariffs are diffuse, whereas the cost of removing them are concentrated on a small number of producers.
Am I missing anything?
Comparative advantage locks you in place at the technology level you're on. In 1955 South Korea might've gone 'oh we should only export rice since the US does all industrial things way better than us'. Indeed, in 1955 that was the case. But they used protectionism to develop their industries so they could eventually compete on world markets in cars, televisions and microchips. There are ways to protect markets without making them lazy, by requiring a quota of vehicles to be exported for example. If someone in a free market wants to buy your cars than they're not totally horrendous.
Furthermore, countries need food security, energy security, domestic weapons production. Better economic efficiency than getting starved or annexed.
Then there's anti-dumping stuff. For instance Saudi Arabia can open up the taps and flood the world with oil to suppress competition. China can do the same with steel.
And what's the argument for this not developing naturally in the absence of government intervention?
Well if South Korea had free trade only, how were they going to develop the capital necessary to compete with established car manufacturers? All the machinery they need, all the training they need to do... that needs a lot of money! Who is going to acquire that investment money if not the govt directly or via protectionism?
Look at microchips in the US - a huge strategic weakness exposed because the US allowed free trade in a market it dominated, letting others surpass them by subsidizing and actively sponsoring their own microchip industries. So now the US is scrambling to subsidize in order to catch up.
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