By Max Kohnstamm
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Additional info for A Nation Writ Large?: Foreign-Policy Problems before the European Community
Having what is perhaps the most mobile work force in the world, the US could long afford to ignore the difficulties facing the worker who has to change occupation several times in his lifetime. Total US unemployment had been falling since 1961. But starting in 1969 rising unemployment, coinciding with steeply increasing imports from Japan, from offshore production, and to a lesser extent, Europe, triggered off a protectionist response, whose international effects were felt, dramatically on August 15, 1971.
A host of new and not so new social concerns find their expression in non-tariff barriers (NTBs), or rather in standards of products and production which have the effect of inhibiting trade between nations: safety and health standards, nuisance and pollution control. Non-tariff barriers have, as a result of the drastic lowering of tariffs in the sixties, become much more visible. Their progressive elimination is high on the agenda of the trade negotiations due to start in 1973. In no other field will the confusion between legitimately divergent social goals (you like heavy, safe cars, I like small ones which consume less fuel), bureaucratic obstinacy, and plain old protectionism be greater.
E. the production of US, Japanese and European foreign affiliates, may amount to 450 billion dollars. If we add to this the value of the home production of these firms, and assume that approximately half this amount represents added value we are approaching an order of magnitude somewhere between the GNP of the Community and Japan. If such a huge chunk of world economic activity no longer plays the game by the familiar rules, it may be time to devise new rules. Its global flexibility not only allows the MNC to shrug off international economic measures imposed by public authorities, but also frustrates domestic policy goals.