Adjustment Assistance and Structural Support
This chapter attempts to relate the problem of malfunctioning internal markets with the social effects of trade liberalization, and discusses how an international consensus may be achieved in specifying limits for national policy. In a world of changing tastes, techniques, sources of materials and public policy, it would be unrealistic to expect that once a national industry had gained a comparative advantage in the production of a particular product it should not be liable to challenge from overseas. In particular, the world-wide diffusion of technical knowledge causes international competitive positions to change rapidly, and technological leads built up over many years are subject to sudden erosion. A study of the trade effects of domestic subsidies would therefore be incomplete without some discussion of the methods available to governments to alleviate the social problems arising from structural change.
KeywordsCapital Stock Comparative Advantage Trade Liberalization Unemployed Worker Average Earning
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