By Max Kohnstamm
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Additional info for A Nation Writ Large?: Foreign-Policy Problems before the European Community
Unlike such equally doubtful and widespread practices as export credits and border taxes, voluntary restrictions reintroduce an element of bilateralism in the system which is in sharp contrast with the universalism of the MFN principle. Also, since these are merely administrative agreements, and worse, increasingly intra-industry arrangements with official blessing, trade policy is removed from the control of democratic processes. 36 A Nation Writ Large? But these ever more ingenious ways of bending or evading the rules of the old system reflect the growing difficulty governments face in pursuing domestic social and economic goals within an international economy guided by the free play of market forces.
Also, since these are merely administrative agreements, and worse, increasingly intra-industry arrangements with official blessing, trade policy is removed from the control of democratic processes. 36 A Nation Writ Large? But these ever more ingenious ways of bending or evading the rules of the old system reflect the growing difficulty governments face in pursuing domestic social and economic goals within an international economy guided by the free play of market forces. If we want to domesticate the nascent anarchic urges of the makers of foreign economic policy, we must domesticate the international economy itself.
But, as we have seen, the lowering of economic barriers has increasingly exposed domestic economies to economic events and policies made abroad. Decisions to inflate or deflate one economic area have immediate repercussions elsewhere. Worse, under the present monetary system some important elements of economic policy, like money supply. increasingly escape the control of most national authorities. In this situation of impotence and conflicting national policies, the danger of relying on pure powerbargaining or worse, the anarchy of simple unilateralism is considerable.