The problem is that while free trade is beneficial over all to a nation, it can lead to significant redistributions of economic privlidge within that overall national benefit. There are winners, and there are significant losers (lose your job, lose your health care etc.) This is a valid and deeply personal concern, and it is this concern that pushes the issue into the political forum. Without taking the political dimension into account, the message of the economics of the thing will fall on deaf ears.
The main thrust of his concern is rooted in truth - there are certainly immediate losers in the marketplace. And, in some ways, the more free and open that market is, the more such competition will be prevalent. This, of course, does not negate Steve's main point. But I think it's an interesting digression. I find it interesting that we hold this concern seemingly situationally. And even when we formally recognize it in other respects, we don't let it get in the way of trade.
For instance, why fear Mexicans taking your jobs as opposed to Texans or Floridians? For sure, different regulatory standards and levels of taxation may set some pegs against us as a country in terms of our labor force. On the other hand, the same factors set up various differentials throughout the states themselves as well. Should one state, for instance, consider not trading with another state that, perhaps, has a lower minimum wage and thus "unfair" advantage? I think most of us would find that pretty silly.
Well, what about the advent of capital that offsets labor? We're continually striving, through technology, to need fewer and fewer people to do the same old jobs. Farming that once took hundreds of workers now takes only a handful. The same goes for production of almost all stripes. This can just as easily, if not even more forcefully, put people out of work. Yet most of us acknowledge the benefit of such advances. The non-Luddites among us don't clamor to stop technological process on behalf of those whose labor may become displaced by it.
So then why, when it is a foreign entity in question, do we suddenly show grave concern for structural shifts in labor? It seems rather inconsistent to find this as some exception to the general economic rule. As horrible as it sounds, one has to wonder what role nationalism and xenophobia play here to some extent. For all the rhetoric of diversity, compassion, and unity, liberals find themselves in a weird position in many respects when the focus of conversation turns from other Americans and technology replacing our workers to people with different languages and skin-colors replacing them.