Purpose -The purpose of this paper is to establish the benefits of free trade, to examine the reasons and outcomes of protectionist policies, and to evaluate the rationale behind trade protectionism. Design/methodology/approach -The methodology used in this paper includes review of the literature and empirical studies published from 1967 to 2008, and descriptive statistical analysis of data published by international organizations. Findings -International trade has been growing faster than growth of world gross domestic product, and countries with freer trade policies benefit more than countries with restricted policies. Yet, trade protectionism continues to be exercised in response to pressure from select industries and political constituencies. The paper also establishes that trade restrictions are harmful to the economies of the trading partners. Originality/value -This paper establishes the benefits of free trade, the harms of trade restrictions, and challenges the popular rationale for protectionism.

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PurposeThe purpose of this paper is to identify the issues in the US‐Canada trade dispute over lumber trade, to analyze the US and Canada's claims and positions in this dispute, and make projections of future possibilities regarding this dispute.Design/methodology/approachThe research method is to review published studies dealing with this dispute and gather public and private data pertaining to issues involved in this dispute.FindingsThe paper finds that the US lumber industry's claims of unfair trade by Canada's lumber industry are not supported. Canada is in compliance with World Trade Organization policies and North America Free Trade Agreement (NAFTA)'s agreement. US antidumping and countervailing tariffs on imported Canadian lumber violate NAFTA's rules. Past and current resolutions to this dispute are temporary.Originality/valueThis paper explores the real reasons behind the dispute and evaluates the merits of the interim solutions.