Imports rise as families gain access to more high quality, affordable products and businesses purchase cutting edge inputs at lower prices. Exports rise as domestic businesses respond to import competition and the availability of cheaper inputs and become more responsive to international market trends and opportunities. But trade liberalisation creates losers as well as winners, as resources are channelled to more productive uses. Short term adjustment incurs costs as the affected industries restructure for the more competitive environment. Some firms close, others open.
Some workers are displaced, others retrained, others enter new jobs.
The costs of adjustment are felt directly by those affected and by the whole community. Government policies and programs need to be sensitive to adjustment pressures on industry and workers, as was the case with the Governments recent decision on the motor vehicles and textile, clothing and footwear sectors. Families have access to a wider range of affordable and high quality products. Falls in trade barriers have contributed to a stronger industrial base, higher productivity, better access to international markets and new technologies, and more competitive manufactured and services exports. Factories have closed, but in food processing, a range of elaborately transformed manufactures, education, tourism and other services the news is good.