ABSTRACT

While the economic achievements under the impacts of WTO integration are easily accepted both theoretically and practically, the social impacts, especially the issues concerning to labour and social appear not to be homogenous across countries. Globalization raises number of questions in respect of its social dimensions: What this process have impact on work, the quality and quantity of employment, changing of job structure, income and income redistribution, and regulations of labor market[1].

1) Background

The ASEM process began in March 1996 with the first Asia-Europe Meeting in Bangkok.

 Absolute Advantage

Adam Smith first developed the idea that international trade could be mutually

beneficial by allowing countries to exploit the opportunities of an

international division of labor. Any country may enjoy an absolute advantage

over others in the production of specific goods, and would benefit from trading

those goods in exchange for others in which its partner has an advantage. For

example, Great Britain has an absolute advantage in the production of cloth, and

Portugal enjoys a similar advantage in the production of wine; both countries’

welfare will improve by trading these commodities. This concept yields a narrow

view of the gains from trade, insofar as it fails to capture the benefits that

countries might enjoy even when one partner has an absolute advantage in the

production of all traded commodities. It is thus to be distinguished from the

more sophisticated notion of comparative advantage. (Note that while Smith used

the phrase “absolute advantage” at various points in The Wealth of Nations,

especially in his discussion of colonies, he did not mean it in the sense

employed here. The qualifier “absolute” was added by later commentators to

distinguish Smith’s conception from that of Ricardo.)