foreign producers, which means they will lose money on any sugar they produce and sell.

3. Trade barriers raise the price of goods in protected industries. If those products are inputs in other

industries, it raises their production costs and then prices, so sales fall in those other industries. Lower

sales lead to lower employment. Additionally, if the protected industries are consumer goods, their

customers pay higher prices, which reduce demand for other consumer products and thus employment in

those industries.

4. Trade based on comparative advantage raises the average wage rate economy-wide, though it can reduce

the incomes of import-substituting industries. By moving away from a country’s comparative advantage,

trade barriers do the opposite: they give workers in protected industries an advantage, while reducing the

average wage economy-wide.

5. By raising incomes, trade tends to raise working conditions also, even though those conditions may not
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