Question

How would you counter the argument that the U.S. needs to restrict textile imports in order to save American jobs?

Answer 1

The law of comparative advantage ensure that the factor of production gets employment that experience is a reduction in their earnings and job losses when the country specialises in the production of the product in which it has comparative advantage. As a result of such trade generally the factor of production associated with the exporting product experiences an increase in their earnings.

Becausethe country is not producing other products with equal efficiency there factors of production have a lower earnings and this might shut down some industries in the medium term. But because of mobility of labor between industries there are actually no job losses because those workers will find jobs in Other industries that produces the specialised product.

Using this argument we can say that because United States has comparative disadvantage in textiles it will gain from importing textile products and exporting the ones in which it has comparative advantage. American jobs will be lost because workers working in textile production will lose their job. But the law of comparative advantage will ensure that they will get job in the production of the commodity which the countries is exporting so that actually there will be no job losses if trade pattern follows comparative advantage. There is no requirement of restricting imports of textiles to save American jobs.