Europe's World

The EU system shoots itself in the foot when it levels trade defence measures against low-cost competitors, warns Henrik Isakson of the Swedish National Board of Trade.

The bottom line is that the EU really should not, under the guise of countering unfair trade, restrict competitors from exploiting natural comparative advantages just because we cannot compete with them. When we do so we have to accept increased prices and thus lower welfare. And what will happen when our trade partners seek to even out our own comparative advantages? European companies could yet find it harder to get market access overseas, and then a vicious circle of protectionism would develop.

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