[A letter by my friend Sanjay and his co-author Christian Barry. If anyone is interested, the two of them actually make good on the claims on this letter -- they seem IMHO to have plausibly worked out all the details of how the conditions for workers in poor countries could be steadily and systematically globally improved without falling into any of the obvious traps or tricks that make them worse off instead. It's pretty inspiring if you're a progressive trade geek, with several great ideas I've never seen elsewhere that are applicable in other fields of global justice. If you're interested, their paper on the topic is at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=799924]
http://www.ft.com/cms/s/f1a95b10-10a6-11dc-96d3-000b5df10621.html
Financial Times Letters Column
Published June 2 2007
Alternative ways to link trade with labour standards
From Profs Sanjay G. Reddy and Christian Barry.
Sir, Jagdish Bhagwati ("Foes of free trade get a foot in the door", May
22) describes those who favour the inclusion of labour standards in
trade treaties as "foes" of free trade, whose motivations are "not
altruism and empathy, but fear and self-interest".
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He endorses a "two-track approach" in which "labour standards would be
pursued at the International Labour Organisation, trade at the World
Trade Organisation", and claims that this approach "follows from the
principles of efficient policy design". Although many proponents of
linkage between trade and labour standards may be correctly described
by Prof Bhagwati as foes of free trade, not all are.
As we have argued in the FT (July 24, 2006), there is an alternative
approach to linkage, which would provide an attractive means of
furthering the interests of poorer countries. This alternative would
extend the transparent, rule-based approach of the WTO system to
include an appropriate concern for labour standards (thereby excluding
opportunistic actions by wealthy importing countries). It would require
that poorer countries undertake only those efforts to promote labour
standards that are reasonable to expect in light of their
circumstances; while also ensuring that these countries gain by
providing them with additional access to northern markets and other
forms of reward for their efforts.
Such an approach would not aim to protect the interests of industries
in the rich countries, but rather to provide governments of poorer
countries with the means and the incentive to take steps that benefit
their workers. Such an approach would dampen the present competition
for trade and investment between poorer countries, which results in
labour standards and real wages that are lower than they would
otherwise be without producing any gain for them.
We share Prof Bhagwati's critical view of the agreement on trade
between the Bush administration and the Democrats in the US Congress,
because it does not seek a multilateral, co-operative and
context-sensitive approach to linking trade and labour standards.
Developing countries should favour linkage of the right kind, demanding
it in the multilateral Doha round.
Sanjay G. Reddy
Assistant Professor of Economics, Barnard College and
School of International and Public Affairs, Columbia University,
New York, NY 10027, US
Christian Barry
School of Politics and International Relations,
University College, Dublin, Ireland
Copyright The Financial Times Limited 2007