28 Controversies in Trade Policy, Part 2

28 Controversies in Trade Policy, Part 2 - Controversies in...

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1 1 Controversies in Trade Policy • Agenda: – The Anti-Globalization Movement. • Globalization and Low-Wage Labor • Labor Standards and Trade Negotiations. • Environmental and Cultural Issues. • The WTO and National Independence. 2 The Anti-Globalization Movement • Introduction: – The rise of manufactured exports from developing countries is one of the major shifts in the world economy over the last 25 years. – Workers who produce manufactured goods for exports in developing countries are paid very little by advanced-country standards . 3 The Anti-Globalization Movement • Introduction: – Should low wages and poor working conditions be a cause for concern? • The standard analysis of comparative advantage suggests that trade is mutually beneficial to the countries that engage in it. • Moreover, when labor-abundant countries export labor- intensive manufactured goods, their national income should rise and the distribution of income should shift in favor of labor. 4 The Anti-Globalization Movement • Trade and Wages Revisited: – Critics of expanding international trade argue that the very low wages and associated poor working conditions are evidence that globalization is not helping workers in developing countries.
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2 5 The Anti-Globalization Movement • Trade and Wages Revisited, An Example: – Two countries, the U.S. and Mexico. – Two industries, high-tech and low-tech. – One factor of production, labor.
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This note was uploaded on 02/25/2012 for the course ECON 181 taught by Professor Kasa during the Spring '07 term at Berkeley.

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28 Controversies in Trade Policy, Part 2 - Controversies in...

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