Dear all, Upon inheriting the Looking Glass from our predecessors, we identified a number of key issues. Firstly, there were simply not enough articles being published, due both to a lack of submissions from the school community and limited responsiveness from the previous Academic Team. Secondly, the Looking Glass had not been advertised or explained effectively enough to the wider school community. As a result, we plan to implement a more consistent and engaging stream of articles on the Looking Glass. As part of this initiative, we are looking to recruit a select group of keen writers from across the lower school who would be willing to produce one high-quality piece of writing, discussion, or media each month for publication on the Looking Glass. We believe this will be hugely beneficial both to the school community, which will gain access to a wider range of opinions and viewpoints, and to prospective writers, who will be able to reference their experience contributing to the Look...
Note: The following article was written by Shane Nagpal L6B (20NagpalS@students.watfordboys.org)
Global trade is not a small side issue. UNCTAD estimated that global trade in goods and services surpassed $35 trillion in 2025, reaching a new record. This makes the question of free trade feel urgent rather than theoretical.
A cheap T-shirt, a smartphone assembled across five countries, fruit in winter, coffee before school. The cotton from the T-shirts may be grown in one country, stitched in another, shipped through a third and sold on a British high street by the weekend. Free trade is everywhere. It sits quietly behind the lower prices consumers enjoy and the larger markets firms depend on. But the same T-shirt can also tell a darker story: a closed factory in Talbot, a steelworker in Ohio, or a farming community hit by retaliatory tariffs. Free trade creates winners and losers. The question is not whether the winners exist. The real question is whether the winners gain enough, and whether the losers are treated as unavoidable casualties and how well it is managed - enough to make free trade desirable?
The strongest advantage of free trade is efficiency. Ricardo’s theory of comparative advantage (1817 - On the Principles of Political Economy and Taxation) argues that countries should specialise where they have the lowest opportunity cost. On a production possibility frontier, this means a country focuses on the goods it gives up least to produce, allowing trade to push consumption beyond what its own PPF would normally allow. Even if one country is better at producing almost everything, trade can still increase total output if each country focuses on what it is relatively best at.
Firms gain economies of scale - cheaper lower run average costs from expanding into larger export world markets from saturated domestic markets. This can lead to positive effects on consumers boosting their consumer surplus in the form of lower prices with better quality, variety and choices. For developing economies, the gains can be transformational. Bangladesh is now the world’s second largest ready made garment exporter, with the sector recording $38.48 billion in export earnings in 2024. At its peak, the industry employed around four million workers, with women making up about 80 percent of the workforce. Free trade, therefore, is not just about cheaper clothes in richer countries. It can also create employment and export led development in poorer ones.
However, cheaper goods are easy to celebrate when you are the consumer, but harder to defend when you are the worker competing against them. In real life, labour is not a suitcase that can be moved overnight. A 55 year old steelworker cannot become a software engineer by Monday (Gottfried Haberler on the limitations of comparative advantage - imperfect factor mobility). The China Shock research by Autor, Dorn and Hanson estimated that rising Chinese import competition reduced US employment by 2.4 million workers between 1999 and 2011 (NBER, 2016). That is why free trade can feel brutally unfair. The benefits are spread thinly across millions of consumers, while the costs are concentrated in particular towns, industries and families.
Free trade also increases competition. Protected firms can become X - inefficient because they do not have incentives to innovate and increase efficiency to cut through rival competition via price and non price methods for their customers. Open trade forces them to reduce costs, improve quality and innovate. This can raise productivity, which is essential for long run growth. It also disciplines domestic monopolies. If a national producer charges too much, imports give consumers an alternative. This is especially relevant today because protectionism is rising again. The WTO warned in 2025 that increased tariffs would dampen trade in the second half of 2025 and in 2026. Yale’s Budget Lab estimated that the 2025 US tariffs would raise consumer prices by 1.2 percent in the short run and create an average household income loss of around $1,700. This makes the evaluation stronger: tariffs may look like protection for workers, but it often protects inefficiency and sends the bill to consumers.
But, potentially some protection may be justified if an industry is strategically important, such as food, energy or defence. The pandemic showed that relying entirely on global supply chains can be risky when borders close and shipping breaks down. Also, developing countries may need temporary protection for infant industries before they can compete globally. The problem is that “temporary” protection often becomes permanent because firms lobby to keep it. Once tariffs exist, they create their own political pressure. Protectionism can save some visible jobs in the short run, but it can also raise prices, reduce choice and provoke retaliation against exporters. It is a plaster, not a cure.
Hence, free trade is most desirable when it is rules based - via the WTO providing legal ground rules for trade between nations and aims to make trade flow smoothly, predictably and freely. Its role is not to create perfect free trade, but to stop countries using tariffs and discrimination whenever politics becomes inconvenient. WTO intervention can reduce trade wars, provide dispute settlement and protect smaller economies from being dumped on (figuratively and economically) by larger ones.
However, WTO rules alone are not enough. The WTO can help make trade fair between countries, but governments must make trade fair within countries. If a worker loses their job because of import competition, a Geneva trade rule will not pay their rent. This is why free trade needs domestic adjustment policies: retraining, wage insurance, regional investment, infrastructure, education and stronger safety nets. The OECD notes that displaced workers can suffer large earnings losses, sometimes up to 50 percent in the year of dismissal, and may still earn less years later (OECD, 2018). Ignoring this is not economically clever. It is politically dangerous.
The choice is not between pure free trade and crude protectionism. The better choice is managed openness: open markets and WTO rules, making free trade worth defending, but only if the people who fall on the wrong side of it are not left behind.
Bibliography
Ricardo, D. On the Principles of Political Economy and Taxation.
UNCTAD. Key Statistics and Trends in International Trade 2025.
World Trade Organization. World Trade Report 2024: Trade and Inclusiveness.
World Trade Organization. Global Trade Outlook and Statistics Update 2025.
Bangladesh Investment Development Authority. Textiles and Apparels Sector Profile.
Economics Observatory. What’s Happening in Bangladesh’s Garment Industry?
Autor, D., Dorn, D. and Hanson, G. The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.
OECD. Place Based Policies for Displaced Workers.
Yale Budget Lab. State of U.S. Tariffs 2025.
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