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Lecture 11 - Barriers to Trade

Lecture 11 - Barriers to Trade - Barriers to Trade Barriers...

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Barriers to Trade Barriers to Trade Shallow Integration – no formal barriers to trade between countries Deep Integration – harmonization of policies so that firms can operate over international borders Labour Standards - Standards vary between countries that are rich verses those countries that are poor - 3 approaches have been taken: 1. Harmonization of Standards - All countries should have the same laws and standards (min. Wage laws) - This avoids “the race to the bottom”, countries that do this are called social havens - Countries must ask what standards should they adopt? / What fits their countries economy the best? - This approach makes it difficult to improve the standards and could eventually lead to a “freezing of standards” 2. Mutual Recognition of Standards - It’s a concept that is hard to come to a common understanding - Some countries have a min. wage set at five dollars where others have it set at fifty cents 3. Separate Standards - Generally this is what most countries use -
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