Unfulfilled Trade Policy; Labor, Environment Deals Seal Coffin

Article excerpt


As congressional Democrats and Bush administration officials were congratulating themselves last week for agreeing to include tough, enforceable labor and environmental standards in trade agreements, U.S. trade policy quietly crawled into a corner and died.

"Here lies U.S. trade policy," the epitaph should read. "Loathed by most Democrats and the labor unions they represent; taken for granted by the Bush administration, which never articulated a comprehensive case for liberalization." Meanwhile, completed bilateral agreements with Peru, Panama, Colombia and South Korea, as well as the Doha Round of multilateral trade negotiations, are left orphaned.

It's a telling commentary about how far trade policy expectations have fallen when agreement between the administration and Congress over how to proceed in years-old trade negotiations passes for a significant breakthrough. The chief spokesman for U.S. Trade Representative Susan Schwab offered: "I think there is a growing degree of trust and bipartisanship that will allow the trade agenda to move forward. We showed the world that we can work together." She seems to have forgotten that trade agreements are forged between countries, and last week's domestic accord renders those possibilities less likely.

To the person who feels more than he thinks, the agreement to require stricter, enforceable labor and environmental provisions in trade agreements must sound like progress. It might represent progress for congressional Democrats seeking union support for their 2008 re-election bids, but it will do nothing to improve prospects for trade liberalization. Instead, it will impede trade liberalization and in the process deprive developing countries of opportunities for economic growth, which is the key to raising local labor and environmental standards.

In 1996, trade ministers representing members of the World Trade Organization concluded their ministerial meeting in Singapore with a strong statement of consensus on the issue of labor standards. The statement declared support for core labor standards while simultaneously opposing the idea of enforceable labor standards in trade agreements.

Labor standards are promoted by "economic growth and development fostered by international trade and further trade liberalization," the statement read. In other words, imposing conditions on trade and investment with poor countries only slows economic growth and prevents labor standards from rising.

Today, the WTO includes even more developing countries than in 1996. It's not that they oppose better local labor and environmental conditions. Rather, they fear that rich countries, at the behest of their own import-competing interests, will use those provisions as a fig leaf to achieve protectionist outcomes. …