Isn't trade unfair when foreign workers are paid such low wages?
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If the wages in other countries are determined by competitive market forces, then, no, it is difficult
to argue that trade with that country is in some way unfair. In fact, if all the costs of production
(for labor, land, energy, captital) were the same in every country, there would be no benefit at all from trade between countries.
Indeed, it is the differences between countries (in terms of wages and other costs, technology, natural resources, etc.) which
make trade beneficial, and the greater these differences, the greater the benefits from trading.
Advantages in terms of low wages in poor countries are often offset by advantages of labor productivity and captial-intensity in the US. If a poor country has labor cost which are one-tenth that of the US, then it may still be beneficial to export goods in industries where the productivity in the US is fifteen times higher than in that country, but import goods in industries where productivity in the USA is, say, only five times higher than in that country. US producers benefit in the case of the exports, and US consumers benefit in the case of the imports. Even this kind of 'gain from trade' may be controversial, however, because producers who compete with those low cost imports, and consumers of the exported goods (who may have to pay more) will experience the negative side of this kind of trade. ~
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