&#62; Free trade is all well and good when both partners are trading freely, but China is not doing that.<p>There's no need for the other partner to trade freely to make free trade from your side advantageous to you.  Have you heard of the theory of comparative advantage (<a href="http://en.wikipedia.org/wiki/Comparative_advantage" rel="nofollow">http://en.wikipedia.org/wiki/Comparative_advantage</a>) that explains why this works?<p>"The fundamental logic of free trade can be stated a number of different ways, but one particularly useful version - the one that James Mill stated even before Ricardo - is to say that international trade is really just a production technique, a way to produce importables indirectly by first producing exportables, then exchanging them. There will be gains to be had from this technique as long as world relative prices differ from domestic opportunity costs - regardless of the source of that difference. That is, it does not matter from the point of view of the national gains from trade whether other countries have different relative prices because they have different resources, different technologies, different tastes, different labor laws, or different environmental standards. All that matters is that they be different - then we can gain from trading with them." (<a href="http://web.mit.edu/krugman/www/negot.html" rel="nofollow">http://web.mit.edu/krugman/www/negot.html</a>)