Gains from trade

Whenever we want to buy something, usually we hope to buy it at the cheapest price. We may look around over the internet, ask our friends, or read around magazines or newspapers. It is the same for business. When they want to produce something, they will try to build their plant at the location with the cheapest cost. That is really common sense.

However, when the cheapest location to build a plant is not at the enterprise's home country, some of their fellow countryman may complain about they "bring out jobs out of country" or "benefit someone else economy". Its part of the so called "protectionism" argument. They may also support the protection of local business by setting high tariff, try to prevent foreign business taking advantage on local market.

Those argument can actually be seen worldwide, and the current popular enemy is China. Their cheap labor attracts tons of business building plants there, including their ideological enemies Taiwan and United States. And this not-surprised behaviors of business from those countries has been blamed by some of their politicians.

Here is today's WSJ commentary, Protectionists Never Learn , by George Mason's economics professor Russell Roberts. I think he made a really interesting metaphor using recently red-hot Japanese pitcher:

...The story of the baseball off-season is the Red Sox spending $100 million to bring Daisuke Matsuzaka from Japan to the United States. Dice-K, as he's known, is the ultimate import. He takes away a job from an American pitcher. And the Japanese baseball teams discriminate against American players with strict quotas. But even though America's trade deficit with Japan just hit that all-time high, no one uses Dice-K as a symbol of unfair Japanese trade policy....

His critics is toward to Hilary Clinton' recent comment that "China's holdings of U.S Treasuries threaten our sovereignty." Not only due to presidential campaign, I think this kind of argument will appear very often. Just as this Japanese pitcher case, sometimes we notice only the cons and sometimes we only notice the pros from free trade.