Is free trade passé after all?

Abstract

me express first my great pleasure at being awarded the Bernhard Harms Prize. In the field of international economics, it is now recognized as the profession's most notable award. I feel honored to join today the distinguished economists who have preceded me as recipients of this prestigious prize. It would be logical for me to celebrate this occasion by addressing the great issue that led Adam Smith to give simultaneous birth to both Economics and International Economics. This is the issue of free trade or what we now call the theory of commercial policy. For, this is undoubtedly the area to which I have given my reflection and research in the last three decades: here lie certainly my own comparative advantage and indeed the reason for today's ceremonial occasion. But the subject deserves scrutiny also because the question of free trade has now returned to center stage. This is not simply because, since the 1970s, protectionist demands have increased: as certainly the beleagured executives and administrations of the European Community and the United States know. It is also because the resistance to the supply of protection by these executives may have been imperilled by careless and incomplete assessments of recent developments in the theory of commercial policy itself.