= new reply since forum marked as read
Or France with Germany or the UK? We have "free trade" with those countries as does France with Germany and the UK.
I'm not sure if you are saying that all trade is based on labor arbitrage; just "free trade" (with the 20 countries with whom we have "free trade agreements"
is all about arbitrage; or trade (only "free trade"?) between rich and poor countries is all about arbitrage?
Probably not enough stability or good enough roads to make it worthwhile? 
They moved the assembly of the phone part of the production to Mexico. Oh, it was going to save so much money! They never made back the money they lost on the numerous things they never thought about.
One year, at the end of the year, a truck shipment of phones coming from Mexico to the US was hijacked. Eventually it was found & returned, but the sales department couldn't make year end sales because there was nothing to ship!
Sometimes the shipment of product from China to Mexico would not be on time, so the workers in Mexico were paid to clean the building. This happened so often, that we laughed that they had the cleanest working facility on the planet.
They hired a director who didn't know Spanish, so they also had to hire an interpreter for him. The special insurance policies they had to get to cover them for things like hijacked shipments were unbelievable. And the list went on & on. I asked why they didn't just close shop & bring it back to the States. "It will be worth it eventually." 
~edited for clairty
corruption?
First, no economist expects <i>any</i> comparative advantage to last forever. And similarly, no business expects any business model to last long. It's simply mistaken to say that some business trend -- whether selling wool to the French or whaling for oil -- is beneficial only if it lasts forever. Economics is about constant change, and economic development is path dependent. America would be a much poorer nation today had it not developed its whaling industry in previous centuries. Anyone then who had suggested it shouldn't be done because it was unsustainable would have been wrong. (Today, not needing whale oil to light your desk, you can argue it shouldn't have been done for ethical reasons. At the time, slavery loomed as much the larger issue. As nations get richer, they're able to turn ever more refined ethical lens on their economic practices.)
Second, both the advantages of offshoring manufacturing and the advantages of bringing it back can be real. Sometimes, even when it occurs <i>at the same time.</i> Because it's not all the same manufacturing, and not all the same shores. A parallel example is oil imports and exports. There are plenty of cases where an oil exporting nation, like Canada, also imports some oil. Why? Because there are different grades and types of oil, because refineries are different and don't move around, and there are different markets for the refined products.
Lastly, don't overlook the economic miracle behind your complaint. Forty years ago, any foreign aide or international development policy that promised to lift much of the impoverished world to the point where their income was this high and growing would have been viewed as next-to-impossible. Too miraculous to be thinkable. In fact, the last forty years of development policy history has been one of continual disappointment. Trade is the <i>only</i> thing that has succeeded there.
Best to slink off without comment, Nye Bevan. Anything else will be a lot of "yes, but!" type nonsense. 
Let’s be clear: this isn’t an argument for beggaring thy neighbor, it’s an argument that protectionism can make the world as a whole better off. It’s a second-best argument — coordinated policy is the first-best answer. But it needs to be taken seriously.
What’s the counter-argument? Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics.
http://krugman.blogs.nytimes.com/2009/02/01/protectionism-and-stimulus-wonkish/
A temporary tariff in response to currency manipulation is hardly a general argument for protectionist policies.
than China). In Germany exports (€1.3 trillion in 2011) are about 50% of the economy (€2.6 trillion). In China exports ($1.9 trillion) are about 22% of the economy ($7.7 trillion).
If China does as well as Germany they will be fine. Both Germany, Japan and other countries had to make transition from low-wage export economies ("made in Japan" used to mean "junk" to high-wage economies. Will China make the same transition or implode? I don't know. They have a much worse government than Germany and Japan had after th war. For the sake of the Chinese I hope the adapt.
Count on that. In 2008 China lost 20 million jobs at the drop of a hat because of our recession. That's a huge vulnerability, one that will take at LEAST a generation to fix. China doesn't have nearly that long. Before that time passes, we will suffer either import price miserable inflation (as opposed to import price hyperinflation) or a domestic currency stumble* (or collapse)... and their great miracle will explode in their faces. The price of imports will go up without tariffs. BEFORE China can become immune to it. It's already happening - that's why we're bringing the jobs back.
Another problem is racing to kill China before that: their self-destructive environmental policy, or lack thereof. Your precious offshoring phenomenon which you defend so much, has also been responsible for encouraging China to pollute their air and water so thoroughly that China is facing a major water crisis. Cite: http://articles.cnn.com/2010-09-13/world/china.water.crisis_1_water-shortages-water-supplies-drinking-water?_s=PM:WORLD. Sure, your arguments have made China richer, but they're also making them quite a lot sicker. Happy yet? This is relevant, also: because it will brutally kill China's economy in a way that will make World War II pale in comparison.
I'm sure you have something to say about the fact that if China had strong anti-pollution laws to start with, we would not have moved our jobs there in the first place. Or do you? 
Oh, and you mentioned Japan. Well, Japan transitioned, alright - their high-value goods export-based economy caused the Yen to skyrocket in value. Ever heard of the "Lost Decade"? It started because of that. Oh yeah, and I forgot... they also outsourced a lot of jobs overseas. You bring up Japan but I expect you'll orphan this argument, too, after I remind you of this: postwar Japan had employment for life. Post-free-trade Japan got rid of that. Job stability is crap in Japan, and now they have a whole new generation of men who have little hopes of achieving what their fathers did. These are called herbivore men: http://articles.cnn.com/2009-06-05/world/japan.herbivore.men_1_japanese-men-men-and-women-girlfriend?_s=PM:WORLD
Hmmmm. Funny, that. Japan's culture of lifetime employment transitioned to employee expendability and increased unemployment and hopelessness for the working class after they started outsourcing their jobs. Do you have anything to say about that?
Oh and did I forget to mention that Japan was one of those war-wrecked economies that you spoke of?
Oh, and you also mentioned GERMANY, yet another economy recovering from the ruins of World War II. Germany is starting to move production to cheaper labor countries: such as the United States. BMW has put factories here, to get around their unions in Germany. Germany also has some interesting and sneaky trade barriers, too. You'd be bouncing off the walls with rage if we had these trade barriers: http://seekingalpha.com/article/212461-what-the-u-s-can-learn-from-germany-about-managing-its-trade-deficit
Hope this helps. 
* that's happening as we speak, as evidenced by the skyrocketing price of gold
I wondered why he posted such an OP.
Perhaps "mocking" is in the eye of the beholder.
"Here's a tip: You can shut down any discussion on free trade simply by asking, "What happens when you run out of sources of cheap labor"?
That question has ceased to be hypothetical. That scenario is now happening. America is running out of sources of cheap labor. (With an excerpt regarding rising wages in China.) Jobs, as a result, are coming back to the USA.
So much for the free trade argument. Offshoring is unsustainable. This is being shown by history.
and jobs ARE in fact coming back, because of this:" (With an excerpt to back this statement up.)
Perhaps this is 10 dimensional "mocking" that is too intellectual for me.
