Import Competition from LDCs

Abstract

The emergence of some LDCs as dynamic new competitors in manufactured trade has given rise to considerable disquiet among DMEs, including Finland. This growing concern with the new competition, of course, is not independent of the overall economic conditions in particular industrial economies. The less favourable the economic situation is in general, the stronger the resistance to a potential structural adjustment. It is the simultaneity of adjustment problems facing the DMEs along with the poor overall economic performance — inflation, slow growth, unemployment, balance-of-payments deficit, energy adjustment — that creates a context in which LDC manufactured export growth has been considered as an alarming source of ‘market disruption’. In particular, the rapidly growing, low-cost imports from LDCs have been one of the few irritants to be easily identified. Primarily, attention has been given to their effects on domestic production and employment.