As we noted at the beginning of this section, there are many reasons given for the implementation of trade restrictions (or protection). There are cases where the goals served by trade restrictions are of sufficient importance that it is easy to justify these restrictions. In other cases, however, restrictions benefit only a few, but the costs are borne by everyone.

Whatever the reason for trade restrictions, it is clear that any form of restriction or protection reduces the possible gains from trade and levels of consumption and output that would be possible if specialization and trade could occur uninhibited. With this in mind, it is important that economists help policy makers understand the cost of trade restrictions so that these costs can be weighed against the goals being served by the proposed restrictions, and decisions can be made with both costs and benefits well understood.

Finally, remember that the logic of comparative advantage and gains from trade applies not just to nations but to firms and individuals. Indeed, most market activity involves trade, using currency as a medium of exchange among individuals, firms, and countries producing the goods and services for which they have a comparative advantage, and enjoying the resulting gains from trade.

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