Japan, for all its talk about the virtues of free trade, has now invited Chinese retaliation by imposing emergency barriers on the import of some farm products from China. And that could be only a beginning. Made-in-China clothing is sweeping the chain stores. Japan's towel-makers are conceding defeat. In much of Asia, cheap but good quality Chinese electrical goods are beating out the competition from Japan and other countries.
The Chinese work almost as productively as the Japanese, but for an average wage less than one twentieth of that paid in Japan. Under free trade there is no way Japan or even Asian economies that enjoy lower labor costs can cope with this kind of competition.
Free-trade theory was a product of the 19th century paternalism that said Westerners were endowed with values and a work ethic superior to that of all other peoples. Free trade would allow the backward peoples to take advantage of their cheaper but less efficient labor to produce the less sophisticated, labor-intensive goods needed to exchange for our more sophisticated goods.
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