The discussion of free trade I circulated was short of discussion of some
hot topics these days.  Here is a continuation on environmental and labor
rights.

Environmental issues

Pat: The US had laws only permitting imported products if caught in ways
friendly to sea turtles and dolphins.  The WTO principle of regulating
products but not production processes ruled these laws out of bounds.

Chris: Some countries compete for companies to locate production facilities
by having lower environmental standards.  Thus, free trade puts poor
nations in competition with each other, halting them from regulating
environmental standards.  Instead, we see a "race to the bottom" where
environmental regulations are lax.

Pat: But a poor nation should be able to choose its own level of
regulations.  If lower regulations produces more jobs, why shouldn't a poor
nation be free to pick laxer regulation and less starvation?

Chris: Well, I am unsure of your definition of "nation."  In many poor
nations, the people who suffer from pollution are not informed of the
hazards and are not very politically powerful.  Instead, they are just poor
people who live downstream from a horrific factory or mine.

Pat: I acknowledge some regimes are undemocratic.  I just am unsure if
restricting trade with them will help the poor people you and I both care
about.

Chris: Speaking of undemocratic, the same "race to the bottom" shows up in
labor rights.  Nations with effective laws restricting child labor are at a
disadvantage to competitors where such laws are not enforced.  Similarly,
nations win the game of attracting foreign investors if they shoot union
leaders and otherwise restrict employees' rights.  Moreover, slave labor
remains present in some nations with various forms of indentured servitude.
 The WTO makes it illegal to sanction nations based on these horrific
practices.

Pat: Like you I oppose 10 years old in dangerous factories, slavery, and
shooting or imprisoning union leaders.  I just do not think trade barriers
are a very effective solution to most of these problems.  Children do not
work because their parents are mean, but because they are poor.
Restricting their work makes no sense and does not help them. If rich
nations want children in poor nations to go to school, we should be
subsidizing meals and tuition for schools in poor parts of the world, not
restricting poor families' already limited options.

Chris: So would you permit ANY deviations from widely agreed-on labor
standards.  According to your logic we should have have permitted trade
with Nazi Germany, just as you would encourage trade with China in spite of
its horrific human rights abuses.

Pat: We again agree on the horror of China and other nations' abuse of
human rights.  At the same time, WTO membership and a rising standard of
living seem the most likely ways to help democratic reformers in China.  I
remain unsure why we should undertake actions that hurt this opening
process, even if it assuages our conscience.

LINKS:

Here is a short video clip of Laura Tyson and others discussing the WTO
 http://www.cnn.com/video/world/1999/11/30/rd.wto.101.reut.rm28.html

For more critiques, read the speech by the head of the AFL-CIO at
http://www.aflcio.org/publ/speech99/sp1119.htm

As you'd expect, a more favorable view is from the National Assoc. of
Manfuacturers,
http://www.nam.org/Revolve/WTO.html
"Clearing the Air:  The WTO and America's Health, Safety and Environment"

yahoo has a nice listing:  http://fullcoverage.yahoo.com/fc/Business/Trade/

David I. Levine                 Associate professor
Haas School of Business    ph: 510/642-1697
University of California    fax: 510/643-1420
Berkeley CA  94720-1900                            email:
levine@haas.berkeley.edu
http://web.haas.berkeley.edu/www/levine/