Abstract

Abstract This economic policy forum deals with the question of whether environmental and social dumping justifies countervailing trade policy measures. Rolf Langhammer and Rudolf Adlung both argue that there is no need for such policy measures. Langhammer first questions the effectiveness of anti-dumping procedures in general, since their effect on domestic economies is rather detrimental. He then argues that due to different preferences and factor endowments prices for environment and labour vary between countries. Trade policy measures in order to adjust these price differences would be contra-productive for protecting the environment and the rights of employees. On the contrary, they would reduce economic growth in these countries, which is necessary for a higher level of environmental protection and employee rights. Therefore he rejects the idea of introducing anit-dumping measures with regard to environmental and social objectives. Adlung addresses the question of whether the WTO is an adequate forum for establishing worldwide environmental and social standards. He contends that this is not the case since the WTO provides a framework for trade policy in order to improve the efficiency of markets by reducing state interventions. The inclusion of environmental and social policy objectives in the WTO would have the opposite effect because it would give states an argument for protectionist measures. Therefore he suggests that environmental and social policy aspects should be dealt with in different fora such as the International Labour Organisation. Paul Klemmer holds that protectionist measures might be justified if environmental policies have trade distortive effects. However, so far empirical studies have not proved that divergent international environmental standards lead to negative economic effects. Furthermore, in order to take any action against a country it has to be proved that the country purposefully imposes intolerable damage on its eco-system or its population. Yet, due to methodological problems, it is rather difficult to judge whether a certain policy can be considered to be one of environmental dumping. Hence, protectionist measures are rather inappropriate to avert environmental dumping.

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