Increased trade and mutual investment with other nations are win-win propositions. The problem, however, is a classic one of political economy - while the benefits of engagement are spread amongst a broad, diffuse group lacking a single voice or organizing principle, the pain is felt by a small, concentrated and organized minority. The textile example cited earlier is a perfect demonstration of this.
Textile producers and their workers' unions have successfully lobbied for trade protection in the form of the MFA, etc., for many years. This has slowed the pace of change within that industry, but has cost US consumers billions more in the form of elevated prices for final goods than has been transferred to the textile industry in the form of protection.
When workers are legitimately displaced by trade, policy makers have it within their power to ease that transition while still allowing the broader society to benefit from the gains of trade. Trade makes the whole "pie" bigger. That is an indisputable fact of economics. If the US withdrew all trade protections currently benefiting our textile workers, the resulting gains accruing to consumers in general would be large enough to
guarantee those workers their current level of income through retirement if our elected officials chose to do so. That would obviously be an extreme outcome, but it illustrates my point. If there is long-term damage to workers within an industry coincident with increased trade, that is a failure of domestic policy and political will, not of the trading system in general.
Free trade is like a ratchet. Because of the way that the WTO system is set up, countries which choose to trade more freely with their partners cannot reverse that process without incurring enormous penalties. The ratchet moves only forward, never backward. I have to believe that, in the final analysis, Americans' security and wallets will both benefit from this. Our sources of "soft power" as a nation are profoundly important, and they are transmitted through frequency of interaction. These include culture, media, political mores, etc.. Close trading partners rarely go to war with each other and, just as factor-price equalization ensures that the prices paid for goods and services in different countries will gravitate toward one another as trade deepens, so too will we see a gradual convergence of basic political ideas and social contracts.
BTW - I was trained as a trade and development economist, used to work at the WTO, and have represented many industries involved in trade disputes before the International Trade Commission. If you have arcane questions, fire away, but I won't otherwise sidetrack the discussion.
