McDonald, Frank. (1997) "A policy dilemma: A strong social dimension for the EU or a commitment to free trade?". In: UNSPECIFIED, Seattle, WA. (Unpublished)
Abstract
The social policy of the EU is very different from the social policies of the member states. The EU has few powers in the areas such as social security payments, housing, health and social welfare systems because this is largely the responsibility of the governments of the member states. Furthermore, the EU does not have a large budget available for social policy programmes. Therefore, the EU cannot become significantly involved in large scale social policy expenditures. However, the EU does have significant powers to issue legislation in the area of employment rights and working conditions. Issuing legislation in these areas effectively passes the cost of attaining social objectives from taxpayers to companies, because employers have to comply with the requirements of legislation. The significant expansion of the social dimension of the integration process that the Commission was able to achieve in the late 1980s and the early 1990s led to a considerable expansion of legislation to enhance labour standards in the EU. The consequent increase in the cost of employing labour has significant implications for companies and for the future development of the social dimension. Companies that will find it difficult to compete with imports from countries with lower labour standards are likely to press for more protection from the instruments of the Common Commercial Policy. Therefore, the EU may find that it must abandon its commitment to the pursuit of open and competitive markets in the international trading system. In other words, the development of the social dimension has potentially very significant implications for the attitude and the policy stance that the EU adopts towards free trade.
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