TPP holds out some promise, but it's not over till it's over

TARIFFS, quotas and other trade barriers create winners and losers on both sides. Their removal can benefit producers in one country, to the detriment of more inefficient ones in others. Yet, as free trade proponents are fond of saying, countries get to specialise in producing what they are good at, lowering costs for everybody.

The picture is far more complex within countries. Consumers will benefit if prices come down, but not if they lose their jobs when their employers go out of business. Governments with fractious lawmakers championing specific business interests can run into trouble when trying to convince the public of the benefits of free trade.

Nevertheless, the Trans-Pacific Partnership (TPP) trade deal struck on Sunday by the US, Japan and 10 other countries including Singapore, promises to tilt the balance in favour of free trade. The deal comes at a time when stock markets fret over slowing global trade growth, weak productivity gains, and a lack of consumer demand. With the deal, sentiment has been given a boost.