Image of Miraco flexible printed circuits prior to de-panelization.An Olympus Stylus camera without the case, showing the flex circuit assembly.
Flexible electronics, also known as flex circuits, is a technology for assembling electronic circuits by mounting electronic devices on flexibleplasticsubstrates, such as polyimide, PEEK or transparent conductive polyester film. Additionally, flex circuits can be screen printed silver circuits on polyester. Flexible electronic assemblies may be manufactured using identical components used for rigid printed circuit boards, allowing the board to conform to a desired shape, or to flex during its use.
Manufacturing
Flexible
printed circuits (FPC) are made with a photolithographic technology. An
alternative way of making flexible foil circuits or flexible flat cables (FFCs) is laminating very thin (0.07 mm) copper strips in between two layers of PET. These PET layers, typically 0.05 mm thick, are coated with an adhesive which is thermosetting, and will be activated during the lamination process. FPCs and FFCs have several advantages in many applications:
Tightly assembled electronic packages, where electrical connections are required in 3 axes, such as cameras (static application).
Electrical connections where the assembly is required to flex during its normal use, such as folding cell phones (dynamic application).
Electrical connections between sub-assemblies to replace wire harnesses, which are heavier and bulkier, such as in cars, rockets and satellites.
Electrical connections where board thickness or space constraints are driving factors.
Advantage of FPCs
Potential to replace multiple rigid boards or connectors
Single-sided circuits are ideal for dynamic or high-flex applications
Stacked FPCs in various configurations
Disadvantages of FPCs
Cost increase over rigid PCBs
Increased risk of damage during handling or use
More difficult assembly process
Repair and rework is difficult or impossible
Generally worse panel utilization resulting in increased cost
Applications
Flex
circuits are often used as connectors in various applications where
flexibility, space savings, or production constraints limit the
serviceability of rigid circuit boards or hand wiring.
Most flexible circuits are passive wiring structures that are
used to interconnect electronic components such as integrated circuits,
resistors, capacitors and the like; however, some are used only for
making interconnections between other electronic assemblies either
directly or by means of connectors. Consumer electronics devices make
use of flexible circuits in cameras, personal entertainment devices,
calculators, or exercise monitors.Flexible circuits are found in
industrial and medical devices where many interconnections are required
in a compact package. Cellular telephones are another widespread example
of flexible circuits.
Input Devices
A common application of flex circuits is in Input devices like computer keyboards; most keyboards use flex circuits for the switch matrix.
Displays
LCD displays
In LCD
fabrication, glass is used as a substrate. If thin flexible plastic or
metal foil is used as the substrate instead, the entire system can be
flexible, as the film deposited on top of the substrate is usually very
thin, on the order of a few micrometres.
Flexible batteries are batteries, both primary and secondary, that are designed to be conformal and flexible, unlike traditional rigid ones.
Automotive circuits
In
the automotive field, flexible circuits are used in instrument panels,
under-hood controls, circuits to be concealed within the headliner of
the cabin, and in ABS systems.
Printers
In
computer peripherals flexible circuits are used on the moving print head
of printers, and to connect signals to the moving arm carrying the
read/write heads of disk drives.
Flexible, thin-film solar cells have been developed for powering satellites.
These cells are lightweight, can be rolled up for launch, and are
easily deployable, making them a good match for the application. They
can also be sewn into backpacks or outerwear, among many other types of consumer-oriented applications.
The growing markets related with flexible and/or portable electronics, such as for self-powered IoT systems, have driven the development of bendable thin-film photovoltaics (PV) in view of enhancing the energetic autonomy of such off-grid devices.
It has been shown that this class of PV technologies is already capable
of reaching high solar-to-electricity efficiencies, at the level of
rigid wafer-based solar cells, particularly when integrated with
effective light-trapping structures. Such photonic schemes allow high
broadband absorption in the thin PV absorber materials, despite their
reduced thickness required for mechanical bendability.
Skin-like circuits
In December 2021, engineers from Keio University in Tokyo and Stanford University
announced the creation of stretchable and skin-like semiconductor
circuits. In the future, these wearable electronics may be used to send
health data to doctors wirelessly.
History
Patents issued at the turn of the 20th century show interest in flat electrical conductors sandwiched between layers of insulating material. The resulting electrical circuits were to serve in early telephony
switching applications. One of the earliest descriptions of what could
be called a flex circuit was unearthed by Dr Ken Gilleo and disclosed in
a 1903 English patent by Albert Hansen that described a construction
consisting of flat metal conductors on paraffincoated paper. Thomas Edison’s lab books from the period indicate that he was thinking to coat cellulose gum applied to linen paper with graphite powder to create what would have clearly been flexible circuits, though no evidence indicates that it was reduced to practice.
The 1947 publication "Printed Circuit Techniques" by Brunetti and Curtis a brief discussion of creating circuits on what would have been flexible insulating materials (e.g. paper).
In the 1950s Dahlgren and Sanders made significant strides developing
and patenting processes for printing and etching flat conductors on
flexible base materials to replace wire harnesses. An advertisement from the 1950s placed by Photocircuits Corporation demonstrated their interest in flexible circuits.
Flexible circuits are variously known around the world variously as flexible printed wiring, flex print, flexi circuits, are used in many products. Credit is due to the efforts of Japaneseelectronics
packaging engineers who have found ways to employ flexible circuit
technology. Flexible circuits are one of the fastest growing
interconnection product market segments. One variation on flexible
circuit technology is called "flexible electronics". It involves the
integration of both active and passive functions in the device.
Flexible circuit structures
Flexible circuits display significant variation in their construction.
Single-sided flex circuits
Single-sided flexible circuits have a conductor layer made of either a metal or conductive (metal filled) polymer on a flexible dielectric
film. Component termination features are accessible only from one side.
Holes may be formed in the base film to allow component leads to pass
through for interconnection, normally by soldering.
Single sided flex circuits can be fabricated with or without such
protective coatings as cover layers or cover coats, however the use of a
protective coating over circuits is the most common practice. The development of surface mounted devices on sputtered conductive films has enabled the production of transparent LED Films, which is used in LED Glass but also in flexible automotive lighting composites.
Double access or back-bared flex circuits
Double
access flex, also known as back-bared flex, are flexible circuits that
have a single conductor layer, but allow access to selected features of
the conductor pattern from both sides. While this type of circuit has
benefits, the specialized processing requirements for accessing the
features limits its use.
Sculptured flex circuits
Manufacturing
sculptured flex circuits involves a special flex circuit multi-step
etching method that yields a flexible circuit having finished copper
conductors wherein the conductor thickness differs at various places
along their length. (I.e., the conductors are thin in flexible areas and
thick at interconnection points.)
Double-sided flex circuits
Double-sided flex circuits have two conductor layers. They can be fabricated with or without plated through holes,
though the plated through hole variation is much more common. When
constructed without plated through holes, connection features are
accessed from one side only, and the circuit is defined as a "Type V
(5)" according to military specifications. Because of the plated through
hole, terminations are provided on both sides of the circuit, thus
allowing components to be placed on either side. Depending on design
requirements, double-sided flex circuits can be fabricated with
protective coverlayers on one, both or neither side of the completed
circuit, but are most commonly produced with the protective layer on
both sides. One major advantage is that it allows easy crossover
connections. Many single sided circuits are built on a double sided
substrate because of the crossover connections. An example of this use
is the circuit that connects a mousepad
to the motherboard. All connections on that circuit are located on only
one side of the substrate, except a small crossover connection that
uses the other side.
Multilayer flex circuits
Flex
circuits with three or more layers of conductors are known as
multilayer flex circuits. Commonly the layers are interconnected by
means of plated through holes, though this is not required because it is
possible to provide openings to access lower circuit level features.
The layers may or may not be continuously laminated together throughout
the construction with the exception of the areas occupied by
through-holes. Discontinuous lamination is common in cases requiring
maximum flexibility. This is accomplished by leaving unbonded the areas
where flexing or bending is to occur.
Rigid-flex circuits
Rigid-flex
circuits are a hybrid combining rigid and flexible substrates laminated
into a single structure. Rigid-flex circuits are not rigidized flex
constructions, which are flex circuits to which a stiffener is attached
to support the weight of the components. A rigidized or stiffened flex
circuit can have one or more conductor layers. The terms represent quite
different products.
The layers are normally interconnected by plated through holes.
Rigid-flex circuits are often chosen by military product designers and
increasingly in commercial products. Compaq Computer chose the approach for laptop
computer boards in the 1990s. While the computer's main rigid-flex PCBA
did not flex during use, subsequent Compaq designs utilized rigid-flex
circuits for the hinged display cable, passing tens of thousands of
flexures during testing. By 2013, the use of rigid-flex circuits in
consumer laptop computers had become common.
Rigid-flex boards are normally multilayer structures; however, two metal layer constructions are sometimes used.
Polymer thick film flex circuits
Polymer
thick film (PTF) flex circuits print circuit elements onto a polymer
film. They are typically single conductor layer structures, however two
or more metal layers can be printed sequentially separated by printed
insulating layers. While lower in conductivity and thus limited to
certain applications, PTF circuits have found a home in low-power
applications at slightly higher voltages. Keyboards are a common
application.
Flexible circuit materials
Each
element of the flex circuit construction must be able to consistently
meet the demands placed upon it for the life of the product. In
addition, the material must work reliably in concert with the other
elements of the flexible circuit construction to assure ease of
manufacture and reliability. Following are brief descriptions of the
basic elements of flex circuit construction and their functions.
Base material
The
base material is the flexible polymer film which provides the
foundation for the laminate. Under normal circumstances, the flex
circuit base material provides most primary physical and electrical
properties of the flexible circuit. In the case of adhesiveless circuit
constructions, the base material provides all of the characteristic
properties.
While a wide range of thickness is possible, most flexible films are
provided in a narrow range of relatively thin dimension from 12 µm to
125 µm (1/2 mil to 5 mils) but thinner and thicker material are
possible. Thinner materials are of course more flexible and for most
material, stiffness increase is proportional to the cube of thickness.
Thus for example, means that if the thickness is doubled, the material
becomes eight times stiffer and will only deflect 1/8 as much under the
same load.
There are a number of different materials used as base films including:
polyester (PET), polyimide (PI), polyethylene naphthalate (PEN),
polyetherimide (PEI), along with various fluropolymers (FEP) and
copolymers. Polyimide films are most prevalent owing to their blend of
advantageous electrical, mechanical, chemical and thermal properties.
Bonding adhesive
Adhesives
are used as the bonding medium for creating a laminate. When it comes
to temperature resistance, the adhesive is typically the performance
limiting element of a laminate especially when polyimide is the base
material. Because of the earlier difficulties associated with polyimide
adhesives, many polyimide flex circuits presently employ adhesive
systems of different polymer families. However some newer thermoplastic
polyimide adhesives are making important in-roads.
As with the base films, adhesives come in different thickness. Thickness
selection is typically a function of the application. For example,
different adhesive thickness is commonly used in the creation of cover
layers in order to meet the fill demands of different copper foil
thickness which may be encountered.
Metal foil
A
metal foil is most commonly used as the conductive element of a
flexible laminate. The metal foil is the material from which the circuit
paths are normally etched. A wide variety of metal foils of varying
thickness are available from which to choose and create a flex circuit,
however copper foils serve the vast majority of all flexible circuit
applications. Copper's excellent balance of cost and physical and
electrical performance attributes make it an excellent choice. There are
actually many different types of copper foil. The IPC identifies eight
different types of copper foil for printed circuits divided into two
much broader categories, electrodeposited and wrought, each having four
sub-types.) As a result, there are a number of different types of copper
foil available for flex circuit applications to serve the varied
purposes of different end products. With most copper foil, a thin
surface treatment is commonly applied to one side of the foil to improve
its adhesion to the base film. Copper foils are of two basic types:
wrought (rolled) and electrodeposited and their properties are quite
different. Rolled and annealed foils are the most common choice, however
thinner films which are electroplated are becoming increasingly
popular.
In certain non standard cases, the circuit manufacturer may be
called upon to create a specialty laminate by using a specified
alternative metal foil, such as a special copper alloy or other metal
foil in the construction. This is accomplished by laminating the foil to
a base film with or without an adhesive depending on the nature and
properties of the base film.
Flexible circuit industry standards and specifications
Specifications
are developed to provide a common ground of understanding of what a
product should look like and how it should perform. Standards are
developed directly by manufacturer's associations such as the Association Connecting Electronics Industries (IPC) and by users of flexible circuits.
Most nations are today members of the World Trade Organizationmultilateral trade
agreements. Free trade was best exemplified by the unilateral stance of
Great Britain who reduced regulations and duties on imports and exports
from the mid-nineteenth century to the 1920s. An alternative approach, of creating free trade areas between groups of countries by agreement, such as that of the European Economic Area and the Mercosuropen markets,
creates a protectionist barrier between that free trade area and the
rest of the world. Most governments still impose some protectionist
policies that are intended to support local employment, such as applying
tariffs to imports or subsidies
to exports. Governments may also restrict free trade to limit exports
of natural resources. Other barriers that may hinder trade include import quotas, taxes and non-tariff barriers, such as regulatory legislation.
Historically, openness to free trade substantially increased from
1815 to the outbreak of World War I. Trade openness increased again
during the 1920s, but collapsed (in particular in Europe and North
America) during the Great Depression. Trade openness increased substantially again from the 1950s onwards (albeit with a slowdown during the 1973 oil crisis). Economists and economic historians contend that current levels of trade openness are the highest they have ever been.
Economists are generally supportive of free trade.
There is a broad consensus among economists that protectionism has a
negative effect on economic growth and economic welfare while free trade
and the reduction of trade barriers has a positive effect on economic growth and economic stability. However, in the short run, liberalization of trade can cause significant and unequally distributed losses and the economic dislocation of workers in import-competing sectors.
Features
Trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers).
Trade in services without taxes or other trade barriers.
The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factors of production an advantage over others.
Two simple ways to understand the proposed benefits of free trade are through David Ricardo's theory of comparative advantage
and by analyzing the impact of a tariff or import quota. An economic
analysis using the law of supply and demand and the economic effects of a
tax can be used to show the theoretical benefits and disadvantages of
free trade.
Most economists would recommend that even developing nations should set their tariff rates quite low, but the economist Ha-Joon Chang,
a proponent of industrial policy, believes higher levels may be
justified in developing nations because the productivity gap between
them and developed nations today is much higher than what developed
nations faced when they were at a similar level of technological
development. Underdeveloped nations today, Chang believes, are weak
players in a much more competitive system.
Counterarguments to Chang's point of view are that the developing
countries are able to adopt technologies from abroad whereas developed
nations had to create new technologies themselves and that developing
countries can sell to export markets far richer than any that existed in
the 19th century.
If the chief justification for a tariff is to stimulate infant industries,
it must be high enough to allow domestic manufactured goods to compete
with imported goods in order to be successful. This theory, known as import substitution industrialization, is largely considered ineffective for currently developing nations.
The light red regions are the net loss to society caused by the existence of the tariff.
The chart at the right analyzes the effect of the imposition of an
import tariff on some imaginary good. Prior to the tariff, the price of
the good in the world market and hence in the domestic market is Pworld. The tariff increases the domestic price to Ptariff. The higher price causes domestic production to increase from QS1 to QS2 and causes domestic consumption to decline from QC1 to QC2.
This has three effects on societal welfare. Consumers are made
worse off because the consumer surplus (green region) becomes smaller.
Producers are better off because the producer surplus (yellow region) is
made larger. The government also has additional tax revenue (blue
region). However, the loss to consumers is greater than the gains by
producers and the government. The magnitude of this societal loss is
shown by the two pink triangles. Removing the tariff and having free
trade would be a net gain for society.
An almost identical analysis of this tariff from the perspective
of a net producing country yields parallel results. From that country's
perspective, the tariff leaves producers worse off and consumers better
off, but the net loss to producers is larger than the benefit to
consumers (there is no tax revenue in this case because the country
being analyzed is not collecting the tariff). Under similar analysis,
export tariffs, import quotas and export quotas all yield nearly
identical results.
Sometimes consumers are better off and producers worse off and
sometimes consumers are worse off and producers are better off, but the
imposition of trade restrictions causes a net loss to society because
the losses from trade restrictions are larger than the gains from trade
restrictions. Free trade creates winners and losers, but theory and
empirical evidence show that the gains from free trade are larger than
the losses.
A 2021 study found that across 151 countries over the period
1963–2014, "tariff increases are associated with persistent,
economically and statistically significant declines in domestic output
and productivity, as well as higher unemployment and inequality, real
exchange rate appreciation, and insignificant changes to the trade
balance."
Technology and innovation
Economic models indicate that free trade leads to greater technology adoption and innovation.
Productivity and welfare
A 2023 study in Journal of Political Economy
found that reductions in trade costs since 1980 caused increases in
agricultural productivity, food consumption and welfare across the
world. The welfare gains were particularly large in some developing
countries.
Trade diversion
According to mainstream economics theory, the selective application of free trade agreements to some countries and tariffs on others can lead to economic inefficiency through the process of trade diversion.
It is efficient for a good to be produced by the country which is the
lowest cost producer, but this does not always take place if a high cost
producer has a free trade agreement while the low cost producer faces a
high tariff. Applying free trade to the high cost producer and not the
low cost producer as well can lead to trade diversion and a net economic
loss. This reason is why many economists place such high importance on
negotiations for global tariff reductions, such as the Doha Round.
Opinions
Political poster from the British Liberal Party displaying their views on the differences between an economy based on free trade and protectionism.
The free-trade shop is shown as full to the brim with customers due to
its low prices. The shop based upon protectionism is shown as suffering
from high prices and a lack of customers, with animosity between the
business owner and the regulator.
Economist opinions
The
literature analysing the economics of free trade is rich. Economists
have done extensive work on the theoretical and empirical effects of
free trade. Although it creates winners and losers, the broad consensus
among economists is that free trade provides a net gain for society.
In a 2006 survey of American economists (83 responders), "87.5% agree
that the U.S. should eliminate remaining tariffs and other barriers to
trade" and "90.1% disagree with the suggestion that the U.S. should
restrict employers from outsourcing work to foreign countries".
Quoting Harvard economics professor N. Gregory Mankiw,
"Few propositions command as much consensus among professional
economists as that open world trade increases economic growth and raises
living standards".
In a survey of leading economists, none disagreed with the notion that
"freer trade improves productive efficiency and offers consumers better
choices, and in the long run these gains are much larger than any
effects on employment".
Paul Krugman
stated that free trade is greatly beneficial to the world as a whole,
and especially beneficial to people in poorer nations, since it allows
them to increase their standards of living.
He also stated in 2007 that as the US trades more with
less-industrialized countries whose workers are paid less than
equivalent US workers (2007 wages in Mexico were 1/10th what they were
in the US, and in China less than 1/20th), that increased trade with
those countries will put downward pressure on unskilled labor rates in
the US.
Public opinions
An
overwhelming number of people internationally – both in developed and
developing countries – support trade with other countries, but are more
split when it comes to whether or not they believe trade creates jobs,
increases wages, and decreases prices.
The median belief in advanced economies is that trade increases wages,
with 31 percent of people believing it does, compared to 27 percent who
believe it does not. In emerging economies, 47 percent of people
believe trade increases wages, compared to 20 percent who says it lowers
wages. There is a positive relationship of 0.66 between the average GDP
growth rate for the years 2014 to 2017 and the percentage of people in a
given country that say trade increases wages.
Most people, in both advanced and emerging economies, believe that
trade increases prices. 35 percent of people in advanced economies and
56 percent in emerging economies believe trade increases prices, and 29
percent and 18 percent, respectively, believe that trade lowers prices.
Those with a higher level of education are more likely than those with
less education to believe that trade lowers prices.
The notion of a free trade system encompassing multiple sovereign states originated in a rudimentary form in 16th century Imperial Spain. American juristArthur Nussbaum noted that Spanish theologian Francisco de Vitoria was "the first to set forth the notions (though not the terms) of freedom of commerce and freedom of the seas". Vitoria made the case under principles of jus gentium. However, it was two early British economists Adam Smith and David Ricardo who later developed the idea of free trade into its modern and recognizable form.
Economists who advocated free trade believed trade was the reason
why certain civilizations prospered economically. For example, Smith
pointed to increased trading as being the reason for the flourishing of
not just Mediterranean cultures such as Egypt, Greece and Rome, but also of Bengal (East India) and China. Netherlands prospered greatly after throwing off Spanish Imperial rule and pursuing a policy of free trade.
This made the free trade/mercantilist dispute the most important
question in economics for centuries. Free trade policies have battled
with mercantilist, protectionist, isolationist, socialist, populist and other policies over the centuries.
The Ottoman Empire had liberal free trade policies by the 18th century, with origins in capitulations of the Ottoman Empire, dating back to the first commercial treaties signed with France in 1536 and taken further with capitulations in 1673, in 1740 which lowered duties
to only 3% for imports and exports and in 1790. Ottoman free trade
policies were praised by British economists advocating free trade such
as J. R. McCulloch in his Dictionary of Commerce (1834), but criticized by British politicians opposing free trade such as Prime MinisterBenjamin Disraeli, who cited the Ottoman Empire as "an instance of the injury done by unrestrained competition" in the 1846 Corn Laws debate, arguing that it destroyed what had been "some of the finest manufactures of the world" in 1812.
Average tariff rates in France, the United Kingdom and the United States
Trade in colonial America was regulated by the British mercantile system through the Acts of Trade and Navigation.
Until the 1760s, few colonists openly advocated for free trade, in part
because regulations were not strictly enforced (New England was famous
for smuggling), but also because colonial merchants did not want to
compete with foreign goods and shipping. According to historian Oliver
Dickerson, a desire for free trade was not one of the causes of the American Revolution.
"The idea that the basic mercantile practices of the eighteenth century
were wrong", wrote Dickerson, "was not a part of the thinking of the
Revolutionary leaders".
Free trade came to what would become the United States as a result of the American Revolution. After the British Parliament issued the Prohibitory Act in 1775, blockading colonial ports, the Continental Congress
responded by effectively declaring economic independence, opening
American ports to foreign trade on 6 April 1776 – three months before
declaring sovereign independence. According to historian John W. Tyler,
"[f]ree trade had been forced on the Americans, like it or not".
In March 1801, the Pope Pius VII ordered some liberalization of trade to face the economic crisis in the Papal States with the motu proprioLe più colte. Despite this, the export of national corn was forbidden to ensure the food for the Papal States.
Britain waged two Opium Wars to force China to legalize the opium trade and to open all of China to British merchants.
The program of the world's peace,
therefore, is our program; and that program, the only possible program,
all we see it, is this: [...]
3. The removal, so far as possible, of all economic barriers and the
establishment of equality of trade conditions among all the nations
consenting to the peace and associating themselves for its maintenance.
According to economic historian Douglas Irwin, a common myth about
United States trade policy is that low tariffs harmed American
manufacturers in the early 19th century and then that high tariffs made
the United States into a great industrial power in the late 19th
century. A review by the Economist of Irwin's 2017 book Clashing over Commerce: A History of US Trade Policy notes:
Political dynamics would lead people to see a link
between tariffs and the economic cycle that was not there. A boom would
generate enough revenue for tariffs to fall, and when the bust came
pressure would build to raise them again. By the time that happened, the
economy would be recovering, giving the impression that tariff cuts
caused the crash and the reverse generated the recovery. Mr Irwin also
methodically debunks the idea that protectionism made America a great
industrial power, a notion believed by some to offer lessons for
developing countries today. As its share of global manufacturing powered
from 23% in 1870 to 36% in 1913, the admittedly high tariffs of the
time came with a cost, estimated at around 0.5% of GDP in the mid-1870s.
In some industries, they might have sped up development by a few years.
But American growth during its protectionist period was more to do with
its abundant resources and openness to people and ideas.
According to Paul Bairoch,
since the end of the 18th century, the United States has been "the
homeland and bastion of modern protectionism". In fact, the United
States never adhered to free trade until 1945. For the most part, the Jeffersonians strongly opposed protectionism. In the 19th century, statesmen such as Senator Henry Clay continued Alexander Hamilton's themes within the Whig Party under the name American System. The opposition Democratic Party
contested several elections throughout the 1830s, 1840s and 1850s in
part over the issue of the tariff and protection of industry.
The Democratic Party favored moderate tariffs used for government
revenue only while the Whigs favored higher protective tariffs to
protect favored industries. The economist Henry Charles Carey
became a leading proponent of the American System of economics. This
mercantilist American System was opposed by the Democratic Party of Andrew Jackson, Martin Van Buren, John Tyler, James K. Polk, Franklin Pierce and James Buchanan.
The fledgling Republican Party led by Abraham Lincoln, who called himself a "Henry Clay tariff Whig", strongly opposed free trade and implemented a 44% tariff during the Civil War, in part to pay for railroad subsidies and for the war effort and in part to protect favored industries. William McKinley
(later to become President of the United States) stated the stance of
the Republican Party (which won every election for president from 1868
until 1912, except the two non-consecutive terms of Grover Cleveland) as thus:
Under free trade the trader is the
master and the producer the slave. Protection is but the law of nature,
the law of self-preservation, of self-development, of securing the
highest and best destiny of the race of man. [It is said] that
protection is immoral [...]. Why, if protection builds up and elevates
63,000,000 [the U.S. population] of people, the influence of those
63,000,000 of people elevates the rest of the world. We cannot take a
step in the pathway of progress without benefitting mankind everywhere.
Well, they say, 'Buy where you can buy the cheapest'…. Of course, that
applies to labor as to everything else. Let me give you a maxim that is a
thousand times better than that, and it is the protection maxim: 'Buy
where you can pay the easiest.' And that spot of earth is where labor
wins its highest rewards.
Free trade may apply to trade in goods and services.
Non-economic considerations may inhibit free trade as a country may
espouse free trade in principle but ban certain drugs, such as ethanol, or certain practices, such as prostitution, and limiting international free trade.
Some degree of protectionism is nevertheless the norm throughout
the world. From 1820 to 1980, the average tariffs on manufactures in
twelve industrial countries ranged from 11 to 32%. In the developing
world, average tariffs on manufactured goods are approximately 34%. The American economist C. Fred Bergsten devised the bicycle theory to describe trade policy.
According to this model, trade policy is dynamically unstable in that
it constantly tends towards either liberalisation or protectionism. To
prevent falling off the bike (the disadvantages of protectionism), trade
policy and multilateral trade negotiations
must constantly pedal towards greater liberalisation. To achieve
greater liberalisation, decision makers must appeal to the greater
welfare for consumers and the wider national economy over narrower
parochial interests. However, Bergsten also posits that it is also
necessary to compensate the losers in trade and help them find new work
as this will both reduce the backlash against globalisation and the
motives for trades unions and politicians to call for protection of
trade.
In Kicking Away the Ladder, development economist Ha-Joon Chang
reviews the history of free trade policies and economic growth and
notes that many of the now-industrialized countries had significant
barriers to trade throughout their history. The United States and
Britain, sometimes considered the homes of free trade policy, employed
protectionism to varying degrees at all times. Britain abolished the Corn Laws
which restricted import of grain in 1846 in response to domestic
pressures and reduced protectionism for manufactures only in the mid
19th century when its technological advantage was at its height, but
tariffs on manufactured products had returned to 23% by 1950. The United
States maintained weighted average tariffs on manufactured products of
approximately 40–50% up until the 1950s, augmented by the natural
protectionism of high transportation costs in the 19th century. The most consistent practitioners of free trade have been Switzerland, the Netherlands and to a lesser degree Belgium. Chang describes the export-oriented industrialization policies of the Four Asian Tigers as "far more sophisticated and fine-tuned than their historical equivalents".
The Global Enabling Trade Report measures the factors, policies and
services that facilitate the trade in goods across borders and to
destinations. The index summarizes four sub-indexes, namely market
access; border administration; transport and communications
infrastructure; and business environment. As of 2016, the top 30
countries and areas were the following:
Academics, governments and interest groups debate the relative costs, benefits and beneficiaries of free trade.
Arguments for protectionism
fall into the economic category (trade hurts the economy or groups in
the economy) or into the moral category (the effects of trade might help
the economy but have ill effects in other areas). A general argument
against free trade is that it represents neocolonialism in disguise. The moral category is wide, including concerns about:
Economic arguments against free trade criticize the assumptions or conclusions of economic theories.
Domestic industries often oppose free trade on the grounds that
it would lower prices for imported goods would reduce their profits and
market share.
For example, if the United States reduced tariffs on imported sugar,
sugar producers would receive lower prices and profits, and sugar
consumers would spend less for the same amount of sugar because of those
same lower prices. The economic theory of David Ricardo holds that consumers would necessarily gain more than producers would lose.Since each of the domestic sugar producers would lose a lot while each
of a great number of consumers would gain only a little, domestic
producers are more likely to mobilize against the reduction in tariffs.
More generally, producers often favor domestic subsidies and tariffs on
imports in their home countries while objecting to subsidies and
tariffs in their export markets.
United States real wages vs. trade as a percent of GDP
Socialists frequently oppose free trade on the ground that it allows maximum exploitation of workers by capital. For example, Karl Marx wrote in The Communist Manifesto
(1848): "The bourgeoisie [...] has set up that single, unconscionable
freedom – free trade. In one word, for exploitation, veiled by religious
and political illusions, it has substituted naked, shameless, direct,
brutal exploitation". Marx supported free trade, however, solely
because he felt that it would hasten the social revolution. He also
viewed the tendency to support protectionism out of spite for free trade
to be unsound. That is because Marx viewed protectionism as a means for
domestic firms to establish "large-scale" industry within its borders,
which would inevitably make it dependent on the world market so that it
could make more revenue for example. He also argues that protectionism
does not stop a country from developing a domestic economic system that
ironically mirrors competitive free trade.
Many anti-globalization groups oppose free trade based on their assertion that free-trade agreements generally do not increase the economic freedom of the poor or of the working class and frequently make them poorer.
Some opponents of free trade favor free-trade theory but oppose free-trade agreements as applied. Some opponents of NAFTA
see the agreement as materially harming the common people, but some of
the arguments are actually against the particulars of government-managed
trade, rather than against free trade per se. For example, it is argued that it would be wrong to let subsidized corn from the United States into Mexico freely under NAFTA at prices well below production cost (dumping) because of its ruinous effects to Mexican farmers.
Research shows that support for trade restrictions is highest among respondents with the lowest levels of education. Hainmueller and Hiscox find:
that the impact of education on how voters think about
trade and globalization has more to do with exposure to economic ideas
and information about the aggregate and varied effects of these economic
phenomena, than it does with individual calculations about how trade
affects personal income or job security. This is not to say that the
latter types of calculations are not important in shaping individuals'
views of trade – just that they are not being manifest in the simple
association between education and support for trade openness
A 2017 study found that individuals whose occupations are routine-task-intensive and who do jobs that are offshorable are more likely to favor protectionism.
Research suggests that attitudes towards free trade do not necessarily reflect individuals' self-interests.
Various proponents of economic nationalism and of the school of mercantilism
have long portrayed free trade as a form of colonialism or imperialism.
In the 19th century, such groups criticized British calls for free
trade as cover for British Empire, notably in the works of American Henry Clay, architect of the American System.
Free-trade debates and associated matters involving the colonial administration of Ireland
have periodically (such as in 1846 and 1906) caused ructions in the British Conservative (Tory) Party (Corn Law issues in the 1820s to the 1840s, Irish Home Rule issues throughout the 19th and early-20th centuries).
Ecuadorian President Rafael Correa (in office from 2007 to 2017) denounced the "sophistry of free trade" in an introduction he wrote for a 2006 book, The Hidden Face of Free Trade Accords, which was written in part by Correa's Energy Minister Alberto Acosta. Citing as his source the 2002 book Kicking Away the Ladder written by Ha-Joon Chang,
Correa identified the difference between an "American system" opposed
to a "British System" of free trade. The Americans explicitly viewed the
latter, he says, as "part of the British imperialist system". According
to Correa, Chang showed that Treasury Secretary Alexander Hamilton (in office 1789–1795), rather than List, first presented a systematic argument defending industrial protectionism.
It is the maxim of every prudent
master of a family, never to attempt to make at home what it will cost
him more to make than to buy. [...] If a foreign country can supply us
with a commodity cheaper than we ourselves can make it, better buy it of
them with some part of the produce of our own industry, employed in a
way in which we have some advantage.
This statement uses the concept of absolute advantage to present an argument in opposition to mercantilism,
the dominant view surrounding trade at the time which held that a
country should aim to export more than it imports and thus amass wealth.
Instead, Smith argues, countries could gain from each producing
exclusively the goods in which they are most suited to, trading between
each other as required for the purposes of consumption. In this vein, it
is not the value of exports relative to that of imports that is
important, but the value of the goods produced by a nation. However, the
concept of absolute advantage does not address a situation where a
country has no advantage in the production of a particular good or type
of good.
This theoretical shortcoming was addressed by the theory of comparative advantage. Generally attributed to David Ricardo, who expanded on it in his 1817 book On the Principles of Political Economy and Taxation, it makes a case for free trade based not on absolute advantage in production of a good, but on the relative opportunity costs
of production. A country should specialize in whatever good it can
produce at the lowest cost, trading this good to buy other goods it
requires for consumption. This allows for countries to benefit from
trade even when they do not have an absolute advantage in any area of
production. While their gains from trade might not be equal to those of a
country more productive in all goods, they will still be better off
economically from trade than they would be under a state of autarky.
Exceptionally, Henry George's 1886 book Protection or Free Trade was read out loud in full into the Congressional Record by five Democratic congressmen. American economist Tyler Cowen wrote that Protection or Free Trade "remains perhaps the best-argued tract on free trade to this day".
Although George is very critical towards protectionism, he discusses
the subject in particular with respect to the interests of labor:
We all hear with interest and pleasure of improvements in
transportation by water or land; we are all disposed to regard the
opening of canals, the building of railways, the deepening of harbors,
the improvement of steamships as beneficial. But if such things are
beneficial, how can tariffs be beneficial? The effect of such things is
to lessen the cost of transporting commodities; the effect of tariffs is
to increase it. If the protective theory be true, every improvement
that cheapens the carriage of goods between country and country is an
injury to mankind unless tariffs be commensurately increased.
George considers the general free trade argument inadequate. He
argues that the removal of protective tariffs alone is never sufficient
to improve the situation of the working class, unless accompanied by a
shift towards a "single tax" in the form of a land value tax.
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