What is the role of government in helping people who lose as a result of foreign trade? 

• Traditional trade theories assume that factors of production are freely mobile between industries and geographic regions within the same country. Therefore, workers who are displaced due to foreign competition can switch to other sectors in a different part of the country after a brief transition without any cost. In reality, labor markets tend to be sticky. Workers do not move even when labor market conditions would suggest they should and they are worse off as others who benefit from international trade are better off.

International trade increases total surplus and therefore increases efficiency, but it will be at the cost of equality. What is the role of government in helping people who lose as a result of foreign trade?

Displaced workers need more than what economists are suggesting