The Implications of Free or Freer Trade for The Harmonization of Other Policies*

The subject of this chapter is the extent to which a movement towards freer, and especially to free, trade among a group of countries either requires or makes desirable a harmonization of their economic policies, including those social policies that have an economic impact. This is a question that naturally concerns the governments and public opinion of countries that, on the one hand, want to improve national economic efficiency and standards of living through specialization and economies of large-scale production but, on the other hand, are fearful of the possible loss of sovereignty in economic policy and of ‘national independence’ that might be entailed in a commitment to freer trade.