Globalisation and Social Exclusion in the EU: Policy Implications. CEPS Working Document No. 159, November 2000

Brenton, Paul. (2000) Globalisation and Social Exclusion in the EU: Policy Implications. CEPS Working Document No. 159, November 2000. [Working Paper]

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Abstract

This paper discusses arguments in favour of trade restrictions in the EU as a response to globalisation. Its economic analysis unequivocally shows that trade and capital restrictions are not an appropriate response in Europe, even if globalisation is a major factor underlying social exclusion. Better policies exist to achieve redistribution, which do not sacrifice the gains brought by trade and capital flows. Indeed, in Europe, workers who are displaced for whatever reason are caught by extensive social protection systems. It is suggested here that fears that globalisation may undermine the ability of governments to levy taxes and raise revenues and so compromise the welfare state in Europe have little foundation. The paper also looks at “fair trade” arguments for trade restrictions in the EU against countries where there is child labour, discrimination and lack of freedom of association. Again trade policies are not a suitable response and their use could be detrimental to the welfare of those suffering from lack of respect for their basic labour rights. Serious attempts to tackle these problems should be undertaken via the ILO, not the WTO, and should be directed at their underlying cause, poverty.

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