International Regulatory Competition and Coordination: Perspectives on Economic Regulation in Europe and the United States

By William W. Bratton; Joseph McCahery et al. | Go to book overview
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16
Competing Conceptions of Regulatory Competition in Debates on Trade Liberalization and Labour Standards

BRIAN A. LANGILLE

There has been much confusion and controversy in the popular press, political debates, and academic journals about the impact of trade liberalizing régimes, such as NAFTA or the WTO, upon domestic policy, particularly environmental and labour market regulation. To take the labour market as an example, there are two sorts of questions which are mooted in these discussions--first, the direct impact of trade liberalization upon the domestic labour market, i.e., jobs; and second, the indirect impact upon domestic labour market policies and laws. This chapter focuses upon the second debate about the impact of trade liberalization, and economic integration more generally, upon domestic labour market policies--that is, on policies regarding collective bargaining, employment standards, occupational health and safety, etc. within any individual jurisdiction. However, this essay is not directly concerned with the substance of those issues, but rather with the basic structure which provides the framework within which this debate is carried on. The great framing dichotomy of that debate is as follows. Critics of trade liberalization allege, among other things, that such liberalization opens Canadian labour standards, for example, to unfair competition from jurisdictions where standards (the United States of America, for example), or at least their enforcement level ( Mexico, for example) are much lower. The critics then argue that we need a 'level playing field' brought about by constraining international 'side agreements' (such as the North American Agreement on Labour Cooperation) or else we will face a 'race to the bottom'. These critics seized upon the idea of a 'race to the bottom' as a critically important conceptual insight which plays the role of an intellectual trump card in their hands.

Against this a number of arguments are deployed, some of which deny the significance or existence of any such regulatory competition, fair or otherwise. But more important are arguments which praise the impact of such regulatory competition. It is these arguments which provide the other half of the frame for our debate over the indirect impact of economic integration. The argument is summed up in the following question: if competition

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