Trade in Services and in Goods with Low-Wage Countries – How do Attitudes Differ?

Abstract:

The extent to which low-wage trade competition in the service sector with posted workers should be allowed in the EU has been a hot issue recently. In Sweden, the so-called Vaxholm conflict has become the symbol for this debate.

In the report economists and psychologists analyse the attitudes to different types of low-wage trade competition. The results confirm that attitudes to low-wage trade competition in services requiring the posting of foreign workers are more negative than to conventional low-wage trade in goods. Attitude formation seems to have both "rational" and "irrational" components. This holds for both those in favour of low-wage competition in services trade and those against, although the degree of "rationality" appears to be larger for the former group.

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