THE RETURN OF NEO-PROTECTIONISM?

Abstract

As a moral corrective, compliance rules may be particularly important for the internal relationships of employees in a company and for the relationships between different companies. There original purpose was to ensure correctness and fairness in day-to-day business.

This article analyzes the role of compliance rules as a non-tariff trade barrier and thus as an instrument of neo-protectionism. The analysis combines economic and legal aspects in the sense of the "institutional economics". The authors deliver a critical examination of the effects of compliance rules in the prevailing world trading system with many empirical examples. They come to the conclusion that with new, extended “Compliance Rules”, governments have an new instrument for protecting their economies by blaming foreign companies (exporters an investors) being not complying with this rules. They can use the argument of a violation of the existing rules, threaten legal sanctions or even intervene by law massively.

The essay makes it clear that with a steady increase in such national regulations of entrepreneurial activity via moral aspects, a protectionist effect is achieved. This can also have a stronger impact on the own domestic economy than on the foreign trade and can be directed against its operators