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But the fabric of international trade discipline has been wearing
thin. A period of widespread economic slowdown and inflation has, perhaps
not surprisingly, brought calls for further protection from an industry now accustomed to it as a matter of course. Governments of major economic powers
have reacted by exacting from their trading partners restraint agreements
which have at times paid little more than lip service to the once respected
rules; and soon afterwards some have sought by various devices to reduce
still further the export opportunities which are provided for in these
agreements.
This regressive attitude has been presented as being justified
by the damage allegedly still being caused by so-called 'low cost' imports
which have, to a greater or lesser extent, been subject to restriction for
nearly two decades. The frequency and fervour of these allegations, however,
tend to obscure the fact that there is very little evidence supporting them.
There is, on the other hand, increasing but less publicised
evidence to support the contention that the declining fortunes of these
industries are due much more to other factors, such as intemal competition
between efficient and less efficient producers and neglect of export markets.
Particularly noteworthy is a recent report by the Secretary-General of the
O.E.C.D. in which he states: 'Changes in comparative advantage, and notably
the emergence of the newly industrialised countries as successful exporters of manufacture, have not been the only or even the main factor behind the financial and employment difficulties of declining industries. Technological change, shifts in the pattern of domestic demand and in relative prices and costs have together played a much more important role.'
It is a point worth stressing too, that the greater the restrictions
on import opportunities for efficient developing country producers the greater
the pressure on them to move up market. And this way not only do they increase their eamings from a limited volume of trade but also they must tend to compete more directly with the higher end of the market traditionally
served by domestic producers.
/The voice.....