Trade and environmental agreements in trade deals

Is the newly announced deal between the White House and Democrats to include labor and environmental protections in trade agreements a good deal? It is hard to know, because the details are not available, and the devil in trade agreements is always in the details. But as a general rule, I do think this approach makes some sense. Can anyone seriously be against the principle that countries that want to intensify their integration with the U.S. should be asked to uphold  basic labor rights, such as the freedom to organize and bargain collectively?  So Dan Drezner is right: this does make me sort of happy.

At the same time, I recognize that this new direction is full of pitfalls--not just disguised protectionism as free-trade fundamentalists fear, but also an inevitable tendency to want to impose our own ways of organizing society on our trade partners. The principle of the right to organize is fine, but different democratic societies have different labor laws, all arguably equally "democratic." If we start judging the adequacy of other countries' laws from the perspective of what WE think is the right set of requirements, we will soon be in trouble.

Which is why I don't think the attempt to enlarge trade agreements to incorporate social and other considerations can go really far (unless you are really serious about it and want to create legal and political integration along with economic integration, as in the case of the EU).

That leaves two options. One is to keep pushing for more trade deals, but in their supposedly "pure" form without any labor, environmental, or other considerations. This strategy is no longer working, for good political AND economic reasons. The other--well the other is what I wrote about here.   

Comments

[DRR]

Prof. Rodrik, have you been following the debate between James K. Galbraith & Jeff Faux at the American Prospect? Galbraith seems to believe that "labor & environmental standards" in trade agreements won't accomplish much.

[Justin Rietz]

"One is to keep pushing for more trade deals, but in their supposedly "pure" form without any labor, environmental, or other considerations. This strategy is no longer working, for good political AND economic reasons."

Would you expand on this statement? First, it isn't clear to me that "pure" agreements are doing any better or worse than "mixed" agreements. Perhpas some examples?

Assuming, however, that this claim is true, what are the "good...economic reasons"?

[terence]

The principle of the right to organize is fine, but different democratic societies have different labor laws, all arguably equally "democratic." If we start judging the adequacy of other countries' laws from the perspective of what WE think is the right set of requirements, we will soon be in trouble.

The trouble is, of course, that China isn't democratic. If it were you could bet your (cheaper now, thanks to globalisation) cotton socks that it would have independent trade unions.

[terence]

doh - Type Pad doesn't let html tags in comments. Here's my last comment reposted:

________
"The principle of the right to organize is fine, but different democratic societies have different labor laws, all arguably equally "democratic." If we start judging the adequacy of other countries' laws from the perspective of what WE think is the right set of requirements, we will soon be in trouble."
_______________

The trouble is, of course, that China *isn't democratic*. If it were you could bet your (cheaper now, thanks to globalisation) cotton socks that it would have independent trade unions.

[Christopher]

Re: "such as the freedom to organize and bargain collectively"

On a somewhat tangential note, do you see this 'basic labor right' as a pure good? I would assume not, but I would be interested to hear what you think the extent of union power/development should be in a perfect world, and then if/how unionization sabotages the cause of "the workers."

I am not so quick to spread the seeds of unionization that has produced such a mixed batch of results in the US and much worse results elsewhere.

Again, that's not saying that forbidding organized labor is the right answer. But I think it needs to be a freedom with clear limitations.

[gallagher]

Environmental supplements to trade agreements can be a good thing, but like all trade policy the devil is in the details--and (like the discussions above on labor) they are not enough to save the environment.

To date, the environmental side agreement to NAFTA is the most ambitious yet the Mexican government estimates that the economic costs of environmental degradation have been ten percent of GDP per year since 1985. See: http://www.ase.tufts.edu/gdae/policy_research/FreeTradeEnvBook.htm

That said, the secretariat set up by the side agreement has engaged in cooperative activities that has led Mexico to adopt some environmental laws that are even more stringent than in the US.

Unfortunately, the Bush Administration has been rolling back the environmental gains in trade agreements since it came to office. The question now is: what exactly will the Democrats propose for environmental measures to these agreement?

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