Public Demand and Social Prorities?

Now here’s an interesting one. (And please note that in keeping with recent Fistful tradition – as identified by Ms T – I am putting a question mark before the title). Pascal Lamy is reportedly considering a discussion paper which proposes allowing countries to impose import bans on products from other countries that do not share their national values and standards.

Now I’m not very convinced that Lamy will take this especially seriously, since I think this type of approach raises more problems that it even purports to solve, but………..it does raise a lot of the interesting issues which have been really facing the EU for some time now. The key question, I suppose, is how you even begin to define ‘national values’. And is the idea that each country in the Union could impose it’s own (eg a Haider influenced Austria?). In which case what becomes of the customs union?

And if we have to define shared community values – well look at the difficulties we are having with the consitution. The problem is there are genuine issues packed away with the old stalking horses. How do we resolve the question of what our food contains? I personally have no strong objection to genetically modified foods, for example, but I can respect the fact that others do, in the same way I can respect the fact that some people want to be vegetarians. So how do we go about setting frontiers. Equally, we might want to practice a trade boycott on a brutal and barbaric dictatorship.

On the other hand many of these proposals could be seen as a Trojan horse, to sneak in all the concerns about ‘social dumping’ etc. And again, they could be just yet another indication that we are once more drifting towards a protectionist environment. We point the finger at the US, and then try to do something similar via the back door. As I said, this probably won’t get very far, but the issues are worthy of our consideration. Off you go:

Governments would be allowed to ban imports from countries that did not share their national values and standards under proposals for radical changes to global trade rules being studied by Pascal Lamy, Europe’s trade commissioner.

The changes are put forward in a discussion paper prepared for Mr Lamy, who has not taken a position on the issue, by his staff and outside advisers. His spokeswoman said he wanted to launch a debate at a conference this summer.

The paper says legalising curbs on imports that do not meet individual societies’ “collective preferences” would promote global economic integration by reducing international tensions.

World Trade Organisation rules prohibit import bans except in specified circumstances, such as when products are found to be unsafe.

However, the paper says the WTO rules give too much weight to science and too little to local social and political sensitivities.

The paper does not detail what kinds of imports the European Union might want to restrict. However, it says divergent national regulations and public attitudes worldwide threaten to create growing trade frictions over environmental policy and in sectors such as agriculture, services, software and pharmaceuticals.

The EU is under strong international pressure over its regulatory policies because of its long-standing ban on hormone-treated beef and de facto moratorium on approving genetically modified crops.

The US and other countries say the measures violate World Trade Organisation rules, though many European consumers support them.

The paper insists it is not seeking a pretext to erect new import barriers. However, it acknowledges that economic liberals and developing countries – long hostile to efforts to link trade and social standards – might attack the idea as protectionist and Eurocentric.

“Mr Lamy believes ‘collective preferences’ will shape trade policy increasingly in the future,” his spokeswoman said. “He believes this is a debate we should have.”

The paper says global integration is entering a new phase that directly threatens countries’ social models and regulatory systems, increasing the risk of “ideological” trade conflicts that will be hard to resolve through existing international mechanisms.

Efforts to harmonise international standards, and rulings by the WTO’s dispute settlement procedures, are not enough to prevent future trade conflicts, the paper says.

Governments imposing trade restrictions would need to show they were based on genuine public demand and social priorities.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

9 thoughts on “Public Demand and Social Prorities?

  1. It seems to me that this problem is somewhat similar to my objections to the war in Iraq. I think that more is wrong with letting whatever nitwit is in the White House this year be the sole judge of what regimes need change than any risk Saddam Hussein actually posed to the world.

    In the same light, I might agree with a proposal that nations with trade sanctions motivated by serious differences in underlying regulatory values should not be viewed as inherently illegitimate. But, I don’t want just anybody to be able to come to the conclusion that some difference in values merits trade restrictions. I’m willing to admit that the UN is not necessarily the best place for that sort of judgment, but that is the kind of place to start. At the very least, I should think that an EU state which wishes to impose such sanctions should have to seek the approval of the European Parliament, or perhaps a qualified majority in the European Commission – something that demonstrates plausibly that this isn’t just protectionism but reflects a genuine international opposition, not just one state or one government being a stick in the mud. If there is a deep dispute that really does divide the world, I think it makes some sense to respect it rather than push for free trade over all other considerations.

    The GMO fight is certainly a real factor in reopening this question of what the limits to free trade are, but I suspect you’re right that this proposal is just political manoeuvering.

  2. “In the same light, I might agree with a proposal that nations with trade sanctions motivated by serious differences in underlying regulatory values should not be viewed as inherently illegitimate.”

    I don’t see that this offers any empirical method of determining what “serious differences in underlying regulatory values” are, or how one might go about discriminating between serious and silly differences. F’rex, I personally see the public attitude of most anti-GMO Europeans as exceedingly silly, bordering on Luddite. A European, in turn, might well see a claim that an implicit subsidy to or protection for, say, Boeing on the basis of U.S. national security is silly. In both cases and countless others, a massive difference exists across borders (and even within them) as to what is or is not serious and important.

    If you open up this barn-door, all you’ve done is given every anti-free-trader a nice argument that is, in the end, impossible to refute. Values cannot be meaningfully disputed, they just _are_.

    That’s actually why I find myself so intolerant of many non-U.S. attempts to modify U.S. behavior with regards to Iraq and similar matters. They appeal to a universality of values that I don’t believe exists.

    Bernard Guerrero

  3. That’s actually why I find myself so intolerant of many non-U.S. attempts to modify U.S. behavior with regards to Iraq and similar matters. They appeal to a universality of values that I don’t believe exists.

    Kinda like religion then.
    …but you gotta make that profession of faith if you don’t want to be pushed out of the congregation.

  4. “Kinda like religion then.
    …but you gotta make that profession of faith if you don’t want to be pushed out of the congregation.”

    Very much like religion, yes. Where I differ, I suppose, is that I don’t think anybody will really get “pushed out of the congregation”.

    In a small town where individuals are subject to all the little social bonding rituals and cues that have developed over eons of living in small groups? Sure. But nations are really just faceless distributions of interests. Many in the U.S. may not like the actions of “France” on the basis of values, and many French may feel the same way about the actions of the “United States”, but the two systems will continue to co-operate (or not) on the same basis they always have: systemic self-interest.

    Bernard Guerrero

  5. But nations are really just faceless distributions of interests.

    Nations are social hierarchies with one person on top. Within that community of national leaders,
    there is another social hierarchy.

    Those national leaders would rather that George W. Bush would be toppled from within because toppling him from without would likely be as damaging to them as to him, but if American voters don’t do the job in November…

    It would only be self-protection.

  6. “Those national leaders would rather that George W. Bush would be toppled from within because toppling him from without would likely be as damaging to them as to him, but if American voters don’t do the job in November…

    It would only be self-protection.”

    Amusing, but overblown. Nobody above Kim Jong Il in the pecking order is likely to have a positive expected return on such activity. :^)

    Bernard Guerrero, odds-maker

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