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Social Policy Dimensions of Economic Integration: Environmental and Labor Standards

In: Regionalism versus Multilateral Trade Arrangements, NBER-EASE Volume 6

  • Kym Anderson

Social policies are likely to have an ever-more prominent role in trade policy discussions in the years ahead for the new World Trade Organization (WTO). Many developing countries perceive the entwining of these social issues with trade policy as a threat to both their sovereignty and their economies, while significant groups in advanced economies consider it unfair, ecologically unsound, and even immoral to trade with countries adopting much lower standards than theirs. This paper examines why these issues are becoming more prominent, whether the WTO is an appropriate forum to discuss them, and how they affect developing and other economies. It concludes that (a) the direct effect on developing economies is likely to be small and for some may even be positive through improved terms of trade and/or compensatory transfer payments, but (b) there is an important indirect negative effect on them and other economies, namely, the potential erosion of the rules-based multilateral trading system that would result from an over-use of trade measures to pursue environmental or labour market objectives.

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This chapter was published in:
  • Takatoshi Ito & Anne O. Krueger, 1997. "Regionalism versus Multilateral Trade Arrangements, NBER-EASE Volume 6," NBER Books, National Bureau of Economic Research, Inc, number ito_97-1, May.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 8596.
    Handle: RePEc:nbr:nberch:8596
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    7. Anderson, Kym, 1995. "The Entwining of Trade Policy with Environmental and Labour Standards," CEPR Discussion Papers 1158, C.E.P.R. Discussion Papers.
    8. Larry E. Jones & Rodolfo E. Manuelli, 1995. "A Positive Model of Growth and Pollution Controls," NBER Working Papers 5205, National Bureau of Economic Research, Inc.
    9. Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February.
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    18. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier.
    19. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-37, September.
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    21. Deacon, Robert T & Shapiro, Perry, 1975. "Private Preference for Collective Goods Revealed Through Voting on Referenda," American Economic Review, American Economic Association, vol. 65(5), pages 943-55, December.
    22. Jagdish Bhagwati, 1995. "Trade and wages: choosing among alternative explanations," Economic Policy Review, Federal Reserve Bank of New York, issue Jan, pages 42-47.
    23. Casella, Alessandra, 1995. "Free Trade and Evolving Standards," CEPR Discussion Papers 1204, C.E.P.R. Discussion Papers.
    24. Steenblik, Ronald P & Coroyannakis, Panos, 1995. "Reform of coal policies in Western and Central Europe : Implications for the environment," Energy Policy, Elsevier, vol. 23(6), pages 537-553, June.
    25. Beckerman, Wilfred, 1992. "Economic growth and the environment: Whose growth? whose environment?," World Development, Elsevier, vol. 20(4), pages 481-496, April.
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