Globalization

Thus, with the establishment of the EEC and the erection of external tariffs, the United States have seized the opportunity of making massive direct investments in Western Europe. Therefore, New Protectionism did not have the expected beneficial effects for the EEC, as it could not protect itself from the American products(via the multinationals). European multinationals invested in NICs, but this affected negatively the European labour market: with the shortening of the product cycle- the manufacturing of goods largely took place in the NIC, while only the assembling is left to the advanced economy.
             New Protectionism led to another type of European encroachment: the reduction of costs for the MNCs involves the spread of technology and expertise to potentially foreign competitors. In order to counteract these threats, the common European policies restricted imports from Japan and the NICs, while trying to set up joint ventures with American and Japanese companies, in an attempt to catch-up technologically. Therefore, they forced the foreign investors to share technology in order to gain access to the closed European market.
             Another effect of New Protectionism has been the alteration of trade negotiating mechanisms, materialized into the violation of the GATT non-discrimination principle by arrangements between the foreign exporters and protected domestic industries. This put, most ironically, the EEC consumers at disadvantage. .
             The Uruguay Round, the most ambitious WTO Round so far gave a new impetus to the globalization of world economy by liberalizing to some extent trade with agricultural products, extending the GATT regulations of intellectual property, services, anti-dumping measures, subsidies and safeguard clauses. .
             In the light of this last successful round and taking into consideration the agreements between the European Union and Japan in gradually allowing the export of Japanese cars in the European market and some reforms of the CAP, there are signs of moving toward liberalization in some sensitive areas.