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Free Trade Among the Industrialised Nations?

  • H. Peter Gray

Abstract

The main theme of this book is that there exist sets of conditions under which some departure from free trade may be warranted. The three major reasons for invoking some sort of discrimination against foreign goods are that:
  1. (a)

    a nation’s economy may suffer a temporary loss of competitiveness because of transitory disturbances (frequently in the financial sector). Or an important industry may temporarily lose its international competitiveness but this competitiveness may be regained (to a substantial degree at least) by improving the industry’s domestic efficiency. This will take time and conditional protection is warranted to allow the temporary conditions to evanesce or to allow the needed improvement in domestic efficiency to be achieved

     
  2. (b)

    the speed of adjustment imposed by the free action of market forces could be excessive and inflict unnecessarily high social costs. Under such conditions protection is warranted to slow down (but not to stop) the process of adjustment

     
  3. (c)

    the combination of new labour-saving technologies (chips and robots), together with the enhanced ability of labour-surplus nations to supply manufactured goods which meet the quality requirements of the industrialised world, will create chronic unemployment for low-skilled workers

     

Keywords

Free Trade Foreign Firm International Competitiveness Temporary Protection Home Industry 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes and Reference

  1. 1.
    This list is not intended to be definitive, and there exist other obvious candidates for inclusion.Google Scholar
  2. 2.
    What is being considered here is technically a free trade area in all manufactured goods: zero impediments to internal trade in manufactures and individual nationally-determined impediments to outsiders.Google Scholar
  3. 3.
    Several US computer firms are manufacturing in France, either through joint ventures or wholly-owned subsidiaries. Given the cost disadvantages of France within the Common Market, it can be presumed that these firms saw a French manufacturing presence as offering leverage in supplying the government sector.Google Scholar
  4. 4.
    Dionne refers to this event as the’ second “Battle of Poitiers” ‘. Charles Martel stopped the Moorish army at Poitiers in 732 AD. It would be more correct to refer to the modern event as the second French victory at Poitiers since France suffered a humbling defeat at Poitiers in 1356.Google Scholar

Copyright information

© H. Peter Gray 1985

Authors and Affiliations

  • H. Peter Gray
    • 1
  1. 1.Rutgers UniversityUSA

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