There are varied issues dividing the world on labor and environmental regulations and how they should be implemented. The fervor of fear surrounding globalization has this issue at a stalemate between North (developed countries) and South (developing countries).
The first article, “Labor Standards and international Trade: A Proposal”, by Reddy and Barry suggests that trade be “redesigned” to consider labor regulations. The problems with this proposal: rewards for effort rather than results, consideration for laborers fear of retribution and the fact that the south will not risk losing a comparative advantage on labor-intensive goods and services. This proposal also lacked pilot examples where labor standards attached to trade agreements have succeeded.
The second article, “Who should govern the world economy: the challenge of globalization and governance”, by Woods drove this divide home. The poorer countries see an Economic Social Security Council as an imperial wolf in sheep’s clothing. The idea of capitalist minds undertaking socialist virtues is a bit trite and contradictory to begin with. The inclusion of a network democracy is a good one but incorporating the private sector to manage the global economy raises some concerns. Who would decide the limitations of participation and who would be accountable?
The third article, “Racing to the bottom: international trade without a social clause”, by Chan and Ross was an eye-opener. It was hard to read about the conditions of China’s militaristic labor camps. On the news today, migrant workers were traveling in droves to see there families for the Chinese New Year. This would be the only time off they have all year. China provides housing and meal provisions to save on production time that might otherwise be lost on migrant workers running personal errands like grocery shopping. Mexican migrants, however, are allowed to bring their families and have time to run personal errands. Chan and Ross discuss the idea of linking a social clause that sets labor standards and links them to trade agreements. But who would enforce them? Already wage arrears are a continuing problem for migrant workers. For now China will continue to set the floor on labor standards in the South-South lose-lose labor game. Even though Mexico enjoys a proximal advantage to the US market, increased environmental and labor standards are driving costs up. Foreign investors are now flocking to the country with the cheapest labor costs and right now it’s China.
The last two articles, “Is NAFTA Working for Mexico?” by Gallagher and “Is Global Environmental Governance Working?” found that relaxed environmental regulations did not necessarily attract dirty (polluting) firms to developing countries.
To conclude, the race to the bottom is not a fair one. Is there a way to incorporate social clauses in trade agreements without stripping the South of their comparative advantage? A coalition in the South to set the floor on labor and environmental standards has been suggested but it will not gain traction without China’s support I am afraid.
Melanie
Labor and Environmental Standards 