Introduction Free trade maximizes national welfare. but it is associated with income distributional effects Most governments maintain some form of restrictive trade policies This chapter examines some of the reasons governments either should not or do not base their policy on economists cost-benefit calculations Copyright C 2003 Pearson Education, Inc Slide 9-3Copyright © 2003 Pearson Education, Inc. Slide 9-3 Introduction ▪ Free trade maximizes national welfare, but it is associated with income distributional effects. • Most governments maintain some form of restrictive trade policies. • This chapter examines some of the reasons governments either should not or do not base their policy on economists’ cost-benefit calculations