Free trade cannot lead to a complete development of industries. The principle of price comparison indicates that a country specializes in the production of certain products. On the other hand, inefficient industries remain neglected. This is how free trade excludes full development. Despite these virtues, many people justify trade restrictions. Second, it could ruin the domestic industry. Because of free trade, imported goods are available at a lower price. This is how unfair and unbridled competition between domestic and foreign industries develops. In doing so, the domestic industry is wiped out. The Indian craft industry suffered under British rule.
The quality argument is often used to justify maintaining employment in the United States. In reality, imported products sell lower quality products at lower prices, reflecting their quality and allowing the consumer to have another choice. Some people like cheap shoes. Foreign producers also have a good track record of improving the quality of their products to comply with U.S. standards. The Japanese automotive industry of the 1970s is an excellent example. U.S. producers in some sectors have done the same. Thus, over the past 20 years, the Californian wine industry has improved the quality of its wines in order to compete with French imports in the states. This has created jobs in the U.S. wine industry – and in the truck industry, storage, advertising, retail and restaurants (allowing them to employ wine managers unfit to work) – while fighting imports from Burgundy and Bordeaux. First, the loss of jobs in the country is accompanied by lower prices for the products that consumers buy, and these benefits should not be ignored by balancing trade-offs on the protection of domestic production with free trade.
The ruse argued in favour of tariffs and protectionism. List argued that moderate tariffs could be justified in economic development at times. List also criticized industrialized countries for some protection when they needed it, but then tried to impose free trade on their competitors when they needed some protection. The ruse used the phrase “Kicking away the ladder” to describe this scenario. First, they must establish free trade with the most advanced nations in order to emerge from a state of barbarism and progress in agriculture. In the second phase, they must use trade restrictions to stimulate the growth of industry, fishing, shipping and foreign trade. In the final phase, after reaching the highest level of prosperity and power, they must gradually return to the principle of free trade and full competition, both domestically and in foreign markets, in order to protect their farmers, producers and traders from indolence and to encourage the supremacy they have acquired. Today, most of the arguments against international free trade are put forward by special interest groups.