7
SOCIAL STANDARDS IN INTERNATIONAL TRADE
A new protectionist wave? Harald Grossmann and Georg KoopmannINTRODUCTION
Liberalisation of trade such as agreed in the Uruguay Round, in conjunction with technological and other structural change, leads to closer economic links between the countries concerned. Liberalisation also implies that intercountry differences, regarding the endowment with factors of production as well as the legal and regulatory framework and policy approaches, become more visible in international competition. The interface between different systems will, however, not only enhance global—and national—welfare but also create tension. In particular, it could render the achievement of certain national goals more difficult and therefore provoke defensive reactions aimed at correcting the resulting ‘distortions’ of competition. The policy response may basically assume two forms: | • Efforts to neutralise existing differences impinging on international competition. Instruments to this purpose are the available mechanisms of ‘contingent’ protection authorising the use of trade restrictions if certain conditions are met. This includes safeguard measures (contingent on import surges), anti-dumping measures (contingent on dumping practices) and countervailing measures (contingent on subsidies). Since in all these cases the interference with trade takes place at the border, the very structures, strategies and policies underlying the respective differences are not directly affected, nor is national sovereignty. |
| • Efforts to reduce the differences themselves. In this case an attempt is made to influence directly the national policy of trading partners in order to ‘level the playing field’. In consequence, national policies with a major impact on international trade and competition would tend to converge and the scope for sovereign action narrow. The problem of competition would be tackled ‘at the source’. |
The question of ‘social distortions’ in international trade can be approached from the angle of both neutralising as well as reducing inter-country differences
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Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information:
Book title: World Trade after the Uruguay Round:Prospects and Policy Options for the Twenty-First Century.
Contributors: Harald Sander - Author, András Inotai - Author.
Publisher: Routledge.
Place of publication: New York.
Publication year: 1996.
Page number: 115.
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