Question

Is trade a zero sum game, i.e. are there any losers to increased liberalization?

Answer 1

It appears that trade is not a zero Sum game. It is actually a positive Sum game because the countries involved in the free trade are expecting positive gains from trade in terms of increased consumption and consumer or producer surplus. Importing country will expect that the consumers will receive a greater variety and a reduced price so that the consumer surplus has increased. Exporting country will respect that it's producer will get a higher price and increased producer surplus. As far as losses from increased liberalization are concerned, there is always a lost one party at the expense of the other whenever there is a trade between two Nations.

Importing countries will experience A reduction in the producer surplus and similarly exporting country will experience reduction in the consumer surplus. But these losses are actually compensated for by the increases in the surplus of the other side so that it becomes a positive Sum game.