There has been a great deal of chin-scratching of late about how the current political situation is anathema to “reform” and how recent elections here and overseas signify a turn against the wonderful economic glories of the 1980s and 1990s, and towards a more protectionist trade policy.

Perhaps politicians and some in the media just need to remember one important thing: trade is essential, but it’s not a one way street.

As with productivity, economists view trade as a requirement for improved living standards.

Under the Abbott and Turnbull governments, free trade agreements have been come to be viewed as economic catnip that will somehow create jobs and spur growth.

As I have noted a few times, while the productivity commission is in favour of more open trade it is rather skeptical of the many benefits politicians suggest come via our free-trade agreements. Most of the claims are complete bollocks – like Turnbull suggesting the China Free-trade agreement is the reason why Chinese tourism will hit record numbers this year.

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The problem with trade is when economists talk of it improving our living standards, they are mostly talking about imports.

And yet when talking about the benefits of free trade, politicians like to mostly talk about exports. The Abbott government realised this, and rather ham-fistedly started calling the China free-trade agreement the “China free trade export deal”.

The reason that imports are a big driver of our standard of living improvements is that standard of living looks at how much you can buy with what you earn. If the cost of what you buy falls then your standard of living rises (unless your income falls by more).

Free trade allows us to import goods at a cheaper price because someone somewhere else either makes them more efficiently than we do, or for a cheaper cost.

Take the cost of cars. In the 1970s and ‘80s the price of cars rose mostly in line with full-time earnings. But as the tariffs on the imports of the cars fell, so too did the price of cars:

Cars now cost roughly what they did in the late 1980s.

An article in The Canberra Times from December 1989 refers to a limited edition Holden Commodore with a price of $43,140. You can pick up a 2016 Holden Commodore for $43,120.

In December 1989 the average annual full-time earnings were $26,850, compared to the current average of $80,932.

Now that is a standard of living improvement.

And if you don’t think trade improves your own standard of living, best consider where the device you’re reading this on came from, the big arse flat TV you have in your lounge room, your kids’ toys, probably even your furniture you’re sitting on.

Trade generally looks a lot better when you just think about people as consumers.

But it does come at a cost. There are now actually fewer people working in manufacturing now than in 1989:

And a comparison of exports for manufacturing and the services sector over the past 30 years gives an indication of winners and losers from trade:

At the start of the century, trade in the services sector was about 1.3 times that of manufacturing, now it is nearly twice the size.

But while manufacturing employment may have fallen, overall employment has of course increased, and young workers who would have gone into manufacturing in the 1980s now go elsewhere – construction perhaps.

But it is easy to understand why workers in some areas of the country get a bit eye-rolly when they hear talk of the wonders of free-trade agreements. Celebrating the cheap price of cars is not so great when you’ve just lost your job making cars – as is happening to 320 more workers in the Adelaide Holden plant.

It a situation not only difficult for those pursuing a more open trade agenda. Progressives who believe there needs to be a price on carbon might be able to point to the benefits to the environment, and the greater investment into renewable energy, but – as Hillary Clinton pointed out to much controversy – that will also lead the loss of a lot of jobs in coal reliant industries.

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There are economic benefits from having open trade, but that does not necessarily mean more of it is better for all.

It’s no surprise that there are winners and losers in any economic “reform,” but neither should it be a surprise that those who stand to lose are making their voice heard via the ballot box.

That doesn’t mean we should bring back tariffs – they’re actually just a consumption tax by proxy. But it does mean that perhaps political leaders need to focus more on people’s concerns. Selling trade is much easier when the standard of living improvements are both rising income and lower prices from imports. And for the past five years we’ve been seeing falling exports prices, and Australia’s overall national income has been stagnant.

In such a situation you can’t just assume people will agree the benefits are obvious – either to the nation’s standard of living, or their own.