Trade benefits people's lives - How does one communicate this?

Pascal Lamy, Director General of the WTO recently spoke at the Minnesota Economic Club on how trade benefits the lives of people and challenging the myth that "protectionism" pays. I found a paragraph on the importance of communicating the benefits very pertinent:

"There is another important part of the trade agenda for which change is urgently required — how we tell the story of trade. In the communication age, you cannot persuade people without a compelling narrative.  One can build a very strong case for trade. We know as well that closing trade down is economically destructive and that instead of protecting jobs, protectionism actually destroys them. Yet, the political discourse on trade in the United States, and in many other countries, is cause for deep concern. Foreign companies and countries seemingly do not “play by the rules”. Imports are demonized. Most worrisome of all, trade is seen as a catalyst for job loss rather than job creation. Yet, the irony is that trade has been and continues to be an important American success story.

The link between trade and jobs is complex and when making the case for trade we need to acknowledge that there are those who are hurt by trade. We need to support programmes that help get such people back on their feet. But equally, we know that those countries practising open trade policies grow faster than those with closed policies. The World Bank tells us that they grow three times faster. Our joint study with the ILO said that the efficiency gains from trade lead to positive overall employment effects in numbers of jobs and the level of wages. We also know that jobs tied to exports pay better, 6 per cent better on average in the United States and 18 per cent better in Minnesota. The OECD points out that any link between unemployment and import penetration is tenuous. A survey of 23 OECD countries reveals that in 1970 the average unemployment rate in those countries was 3 per cent and the import penetration rate was just over 10 per cent. Today, the import penetration average has jumped to 45 per cent while unemployment, though elevated in this post-crisis economy, is at 8 per cent."

Lamy stresses the role of the WTO Secretariat in getting this message across:

" So why is this story not getting out? We at the WTO accept our share of the blame. We can and will do better at explaining how trade improves the lives of most people around the world. Governments and universities need to do more as well. And, frankly, businesses need to lift their play as well. It is companies, after all, which engage in trade, which seek new markets and which benefit from access gained to those markets.

We in the WTO Secretariat have been working hard to establish closer contacts with the business community. We have been hosting seminars at which we explain how we work and why things sometimes don’t work. We have increasingly offered businesses the chance to tell us how we can do better and we plan to do more on this front in the future.

True, we are a member-driven organization and decisions are taken by consensus. But there are things that we in the Secretariat can do to help as well. One of these things is to provide you with better data. Our Made in the World Initiative, for example, has brought to light a great deal of information on how global supply chains work and the impact they have on trade, growth and development. This sort of information can lead to more informed debate and better policy decisions."

The communication disconnect does exist. Has the information and benefits of international trade percolated to the national, state and local levels? Does it seem being too irrelevant to people's daily lives? As developing countries integrate into global economies the relevance and critical importance of international trade will loom large with diverse impacts, benefiting some while disrupting others. Has this been understood and communicated by the domestic leadership to their people? Domestic politics is often preoccupied with varying challenges of differing complexity. The debate on trade often gets intermingled with the issue of protecting one's domestic constituent's interests. Ofcourse, to expect that international trade will be  beneficial in all sectors would be naive. However, to demonise it and fall back into the trap of protectionism too would be disastrous. How can the benefits of trade to people's lives (everyday lives) as opposed to statistics like GDP, growth and macro economic indicators) be communicated effectively?  Is there a way of bringing the benefits of trade to the sub national level and local levels. With democratic decentralisation and local governments being strong in many countries, is there a way to communicate this message to local governing units? After all they represent the pulse of the people also. Is there an interesting way of telling this story?

Committee on Antidumping - Some interesting insights

The WTO website had this report recently about the Committee on Antidumping practises reviewing the various reports of antidumping actions taken by WTO members in the second half of 2011. I had earlier blogged about an article on China and India's antidumping steps here.

The summary of the conclusions of the Committee are found here:

"During the review, the following concerns were raised:

• Japan complained that Australia’s anti-dumping duty from Japan had been in place for 20 years, and that Japan’s share in the Australian market had decreased to 0.5 per cent. It urged the revocation of the measure. Australia invited Japan to bilateral talks on this issue.

• Turkey expressed concerns about Brazil’s on-going investigation on viscose yarn from Turkey, and reserved all its rights. Brazil said it was willing to talk about this issue with Turkey.

• The United States said it was deeply troubled by what it described as lack of due process in China’s anti-dumping actions, and in particular the imposition last December of anti-dumping measures on imports of some $3 billion worth of US automobiles. Separately, Japan and the European Union expressed concerns over China’s anti-dumping investigations on photographic paper and paper board, and on certain high-performance stainless steel seamless tubes, respectively. 

                  ...

• Turkey said that because of deficiencies in the investigation, the Dominican Republic should revoke its anti-dumping measure on steel rods and beams from Turkey.

• China said that 20 years of EU anti-dumping duty on bicycles from China was a case of overprotection, adding that Chinese bicycle exports to the EU had decreased considerably. It also expressed concern that the EU’s anti-dumping investigation on ironing boards was targeting only one Chinese company, which it said was in violation of the Agreement.  The EU said that the measures in question were consistent with the WTO.

• Turkey expressed concern about the Indian anti-dumping measure on soda ash from Turkey, adding that such measures should not be used as disguised protectionism. Norway said that India’s anti-dumping action on caustic soda from Norway was the first time India has initiated such an action against Norway. It maintained that Norwegian companies did not export caustic soda to India during the period under investigation. India said that its anti-dumping procedures were consistent with the WTO.

• China expressed concerns regarding Mexico’s anti-dumping investigations on graphite electrodes and coaxial cables, respectively. The United States said that its companies have communicated serious concerns regarding the dumping margin calculations by the Mexican authorities on chicken legs and thighs from the US. Mexico said its measures were fully in line with WTO rules.

• Turkey said that Ukraine did not meet the WTO criteria in its investigation on float glass from Turkey, and urged termination of the anti-dumping measure.

• Japan said that while it welcomed the United States’ revocation of anti-dumping duty on steel plate from Japan early this year, it continued to be concerned about four US measures on Japanese products that were more than 20 years old. The United States said the situation could be explained by the lack of participation of Japanese companies in US sunset reviews. Japan said that there was little interest from Japanese companies because they believe there was little chance the US measures in question would be allowed to lapse." 

 A tabular analysis of the origin of the country's and the respondent reveals the following:

Sl.No.	Complainant (Exporting country)	Country alleged to have used antidumping measure (Importing country)	Item
1.	Japan	Australia	General
2.	Turkey	Brazil	Viscose Yarn
3.	US	China	Automobiles
4.	Japan and EU	China	Photographic paper and boards, stainless steel seamless tubes
5.	Turkey	Dominican Republic	Steel rods and beams
6.	China	EU	Bicycles, ironing boards
7.	Turkey	India	Soda ash
8.	Norway	India	Caustic Soda
9.	China	Mexico	Graphite electrodes and coaxial cables
10.	US	Mexico	Chicken legs and thighs
11	Turkey	Ukraine	Float glass
12.	Japan	US	General

It is noticed that both the developed countries (Australia, EU, US) as well as developing countries (Mexico, India, China, Ukraine) use antidumping measures as well as face the brunt of it. Hence, it is not a case where antidumping measures are employed only by the developing or developed world against the other. Turkey is an active complainant in these matters alleging that antidumping measures have been unjustifiably deployed against it by Brazil, Dominican Republic, India and Ukraine. The use of antidumping measures is per se not considered protectionist due to the provisions of the WTO Agreement that permits it under certain conditions. The concern is that the actual use of the measures are a disguised form of protectionism which is increasingly being used by both the developed and developing worlds. It is undoubtedly a thin line to distinguish when it is a genuine trade measure and when it is actually an unreasonable barrier.

EU ETS and International Trade Law - Some scholarly analysis finally!

The IELP Blog  had references to scholarly analysis of the EU ETS Scheme by Lorand Bartels, Robert Howse and Henri Joel Nkuepo. I have blogged about this issue (with my limited understanding) ad nauseum here, here, here and here. They were "generalist" blog pieces which had not deep dived into the legal ramifications of scheme in the context of WTO Agreements. Finally some scholarly analysis of the EU ETS scheme is available. Does the EU ETS Scheme contravene WTO Agreements, especially the GATT and GATS obligations?

Lorand Bartels' study titled  " The Inclusion of Aviation in the EU ETS - WTO Law considerations" and Robert Howses' comments analyse threadbare the scheme in the light of the GATT and GATS provisions. Lorand Bartels comes to the conclusion that though the Scheme may violate provisions mainly related to Article XI 1 (being a quantitative restriction) and Article I 1 (Most Favoured Nation treatment), the exceptions provided in Article XX (b) and (g) of GATT related to protection of human, animal and plant life and conservation of exhaustible natural resource justified the scheme. Detailing the applicability  of the Chapeau in Article XX of GATT, the piece provides a glimpse of the complexity of interpretation of the provision in relation to discrimination and regulation. As regards GATS obligation it concludes that assuming that the Scheme is covered by GATS and is justiciable it would be most likely to be justified under Article XIV (b) of GATS related to environmental exceptions.

Robert Howse in his commentary agrees with the above analysis and states:

" The WTO is the one international regime that has addressed specifically in its jurisprudence the legality of unilateral measures to protect the environmental commons. In the landmark Shrimp/Turtle ruling the Appellate landmark Shrimp/Turtle ruling the Appellate Body held that such measures are in principle compatible with the legal framework of the World Trade Organization; in practice, to be legal, they must be applied in a non arbit- rary, non-discriminatory and non-protectionist manner. Thus, I cannot but agree with the ultimate conclusion of Dr. Bartels’ article that the coverage of non-European carriers under the ETS is compatible with WTO law, assuming that its application to those carriers is operated in an even-handed and non-protectionist fashion."

 Henri Joel Nkuepo strikes a slightly divergent note in his working paper "EU ETS Aviation Discriminates Against Developing Countries" where he argues that by treating the airlines of developed and developing countries on the same footing, the EU ETS Directive actually discriminates against the developing countries. Though Article XX of GATT allows for environmental concerns it cannot be discriminatory or arbitrary. Henri argues that the Scheme by not recognising the differences in circumstances of the developing and developed world in terms of their technological capabilities in the aviation sector has in fact discriminated against the developing countries of the WTO. Treating unequals on an equal footing is also discrimination.

The two papers and comment offer interesting, contrasting insights into the complex nature of EU ETS obligations in the context of international trade law. To what extent can the concerns of the environment "distort" trade? What measures can be considered adequate, reasonable and not being restrictive of international trade? Who decides this crucial question? Is it within the realm of WTO jurisprudence at all? Is it the preserve of domestic decision making? As long as the measure is not discriminatory and arbitrary, can it be justified on the grounds of the environment? Is this principle extendable to other non-trade issues - labour rights, human rights, democracy? For example, if a few developed countries, hypothetically, impose a tax on imported goods not complying with certain labour standards (equally applicable to local goods, hence non-discriminatory) which in effect cannot be complied with in the developing world or if complied with will lead to the imported good being non-competitive or inefficient, would this be justifiable under the Article XX exception of "public morals"? Is it opening the window to "disguised" protectionism? Are non-discrimination, non-arbitrariness and reasonableness the only tests to justify the measure? How should one interpret the Chapeau text of Article XX, GATT - "unjustifiable discrimination between countries where the same conditions prevail (emphasis added)"? Does it imply that when there are different conditions (including working conditions, technological advancement, cultural mores) a measure in a country, even on grounds of public morals or safety to human health, will be considered unjustifiably discriminatory? As Simon Lester said these are extremely complex issues and would, in all probability, require, a WTO dispute to get resolved!

Future of WTO - Bright?

With the failure of the Doha negotiations in December 2011, pessimists began questioning the efficacy and relevance of the multilateral trading system and the institutional framework contained in the WTO. The Doha Manar resolution, of the UNCTAD XIII, is in stark contrast in terms of producing a result, albeit theoretical and as a source of general guidance. While many argue that the WTO's relevance and significant role continues due to the monitoring and implementation of the present WTO Agreements as well as the rule based dispute settlement mechanism, there are those who believe that the multilateral institution is at the cross road due to the failure of the negotiations and rise in regional trade agreements.

In a detailed policy brief for the Peterson Institute, Gary Clyde Hufbauer and Jeffrey J.Schott titled "Will the World Trade Organisation enjoy a Bright future?" provide an optimistic picture of the WTO and its future in spite of the present impasse in negotiations. Suggesting a flexible approach for looking at bargains that can be clinched on which substantial progress has been done during the last ten years (without insisting on the single undertaking approach - all or none) and focusing on plurilateral agreements that can address issues in critical areas of trade and environment, services liberalisation, currency undervaluation, zero to zero tariffs in specific sectors, digital economy and state owned enterprises.

In conclusion they recommend:

"We propose a grand bargain that couples a significant harvest from the Doha agenda with the future negotiation of plurilateral agreements among WTO members willing to take rewarding, yet challenging, steps forward. Five parts of the Doha agenda should be agreed immediately: trade facilitation, dutyfree, quota-free treatment of imports from least developed countries, phaseout of agricultural subsidies, discipline of farm export controls, and reforms to dispute settlement. These measures cause little economic pain to any WTO member while delivering benefits to all. One plurilateral agreement is already in motion. In early January 2012, a group of 16 countries—including the EU-27, the United States, Australia, Taiwan, and Singapore— met to discuss plans for a services plurilateral agreement, under Article V of the GATS but outside the Doha agenda. These talks should set the stage for plurilateral negotiations on a range of other pressing issues, several identified in this Policy Brief. 

Our analysis indicates that plurilateral agreements on services liberalization, WTO-IMF coordination on currency undervaluation, greenhouse gas and energy measures, zerofor-zero tariffs and limits on behind-the-border barriers for trade in select industrial sectors, and rules of the road for SOEs are promising next steps. While each of these topics presents unique negotiating challenges, we recommend three common features for future plurilaterals, both to promote negotiations and to give the agreements more bite. First, the plurilateral agreements should be “inside” the WTO. This increases the likelihood they will eventually become universal and meanwhile ensures access to legally binding dispute settlement procedures. Second, the plurilaterals should extend their benefits on conditional MFN basis to nonmembers. This both eliminates the “free rider” problem and provides a strong incentive for wider membership. Finally, we recommend that the trade or subject coverage of each plurilateral should extend to “substantial” portion of world commerce (a minimum of around 40 percent), not necessarily a “critical mass” (often interpreted as 90 percent coverage). The “critical mass” threshold was not articulated in the Marrakesh Agreement as a requirement for a waiver from the unconditional MFN rule; moreover, the GPA demonstrates that significant liberalization does not depend on covering a “critical mass” of countries. 

We conclude where we started. The WTO can have a bright future, but it cannot rely solely on its proven competence as a judicial body nor its acknowledged expertise in gathering statistics and analyzing trends. Crowning these strengths, the WTO must launch a new era of trade and investment negotiations. Other promising approaches may exist, but we think that plurilateral agreements on pressing global issues offer an excellent path forward."

The policy brief discusses many ways of getting out of the impasse - to step back and look at the gains and go on multiple tracks of plurilateral agreements (like the Government Procurement Agreement). The suggestions on State Owned Enterprises reinforce the ideological position of the State's limited role in development as against the role of the market and may need more critical analysis. Overall the steps suggested do offer a starting point for a fresh look at where the negotiators left off at Doha. It is one thing to say that the WTO is live and kicking because of its "crown jewel" - the DSM; it is quite an other thing to achieve fresh progress in negotiations to give a fresh lease of life to the multilateral trading system. After all,  however well the dispute settlement mechanism functions, beyond a point, it cannot exist in a vacuum where the political negotiations are not addressing realities of international trade. That would lead to a situation of judicial overreach that may threaten the system as a whole. The approach suggests a middle path - no single undertaking, work on the progress achieved and aim for plurilateral agreements.

Dani Rodrik, Joel Trachtman and domestic policy space - Yes and a No?

I have often raised the issue in this blog about WTO  and domestic, regulatory policy space. Do the WTO Agreements unreasonably restrict policy space for nations to implement their policies? Are the restrictions to policy space justified? Is there sufficient scope within the contours of the various agreements to pursue one's domestic agenda? Do the provisions in the TRIPS Agreement , Agreement on Agriculture  and SCM Agreement  violate a country's sovereign control over domestic policy making? Critics of the WTO argue that the nation state's influence is withering away due to globalised trade rules and are losing their power and significance. They challenge multilateral trade rules as an infringement of sovereignty and democratic governance.On the other hand, supporters of the globalised, rule based multilateral system argue that these rules are not unreasonable and do not infringe upon country's ability to govern. They only reduce the barriers to trade and restrict unfair "protectionism" which is detrimental to the globalised economy.

Prominent amongst the critiques of unhindered globalisation is Dani Rodrik  who argued that hyperglobalisation, democracy and national autonomy cannot go together. I have blogged about his views earlier here and here. In his book "TheGlobalisation Paradox" the central argument, although not framed as such, operates as a critique of international law. He advocates a strictly limited role for international law relating to globalization, providing “traffic rules” for international trade, but avoiding other constraints on national policy prerogatives. Joel Trachtman  counters this by arguing that WTO as an institution as well as the multilateral legal framework does allow nations to pursue their domestic policy choice to the extent that they are not discriminatory or protectionist. I found several paras in this response  of Joel Trachtman that addresses some of the issues of the trade-off between multilateral rules and domestic policy choice.

"Rodrik suggests that today’s World Trade Organization is heading toward this kind of domination in order to promote hyperglobalization, in which domestic economic management is made subservient to international trade and finance. This seems seriously overblown. The WTO is not a “them,” but an “us”; in the vernacular of Geneva, it is a “member organization.” It is composed of states, and no treaty rules are established unless each state agrees. Each state agrees through its own system of ratification, which incorporates the democratic accountability that that state determines is needed. What is the mechanism by which this will result in an imperial WTO, suppressing the autonomy of its member states?

Existing WTO rules are far more respectful of national autonomy than Rodrik concedes. WTO rules only selectively constrain domestic economic management, only do so in ways that states have agreed, and have only very small impacts on policies that are neither protectionist nor mercantilist (by “mercantilist,” I mean government policies that are designed to promote exports).

          ...

It is entirely natural, efficient, and consistent with national autonomy that states contracted with one another to reduce the scope of policy externalities where the national intervention is not motivated by ordinary domestic goals, but by opportunities to achieve domestic protectionist goals at the expense of foreign persons. This is the “virtual representation” role of international law. The purpose of trade law in this context seems to be to allow states to agree to avoid creating these inefficient policy externalities, not to force all states to dance to the same tune.Furthermore, as suggested above, the entry of states into the WTO was an expression of their democratic politics. Moving forward, states may withdraw from the WTO at any time, so the continuing membership of states in the WTO is, in a sense, a continuing expression of their democratic politics. Finally, and perhaps more importantly, the structure of remedies for violation of WTO law allows states to simply violate their WTO commitments in exchange for suspension of concessions or other obligations in a substantially equivalent amount—the remedy is simply a re-establishment of a reciprocal level of liberalization. Democratic politics is empowered to change its mind, but you cannot keep concessions that you do not pay for with reciprocal concessions.

...

In conclusion, it is necessary to recognize fully that international law can be understood as a servant of national autonomy, and of national welfare maximization. Of course, there are circumstances in which international law is formed in a way that seems coercive or ill-considered, but then it is incumbent upon us to address the underlying coercive structure or the analytical basis for international law initiatives, rather than to suggest that international law should not be used. Its potential as a tool of welfare enhancement is too great for states to abjure its use."

Do the WTO Agreements give adequate policy space to countries to maintain domestic regulatory independence? It is necessary to analyse each of the various multilateral agreements to come to a conclusion either way. While there is no doubt that on certain principles (national treatment and most favoured nation treatment) domestic policy space is restricted, the Agreements do give countries the flexibility to act based on their perceived "national interest" as long as the measure is not "protectionist" or "discriminatory" between imported and domestic goods. 


Can these provisions be considered as some examples of exercise of domestic policy space within multilateral trade rules:

1. General exceptions under Article XX of GATT and other exceptions under various Agreements 
2. Anti-dumping measures
3. Safeguards Agreement
4. Non-actionable subsidies under the SCM Agreement
5. Legitimate objectives under Article 2.2 of the TBT Agreement

In other words, though unreasonable restrictions to trade and protectionism is prohibited under various provisions of the WTO Agreements,there are various provisions which provide for countries to take measures to protect domestic interests. If one perceives raising tariffs or imposing quantitative restrictions or providing export subsidies as per se a sine qua non of domestic policy space, then the WTO would be viewed as infringing these rights. However, if reduction of barriers to trade and removing unfair conditions of competition are considered apriori necessities, then the Agreements do have an element of providing sufficient policy space to regulate. Further, in many areas of domestic policy space like education , health, public provisioning of infrastructure the WTO has no say and influence. The State can continue to implement policies that suit its local needs and are considered approriate. For example, how much and what kind of public investment in education as well as to what extent the State should provision it is outside the realm of the WTO. However, subsidies (when they relate to exports or favouring local content vis a vis imported goods) come within the purview of the WTO rules. Hence, when we speak about domestic policy space we need to qualify our statement that in certain areas of domestic regulation the ambit of multilateral trade rules do have a bearing. This is not to imply that the WTO has a hegemonic influence on all national, domestic policy imperatives. To imply that would be simplistic. Supporters of the multilateral system as an effective instrument of international law would argue that the State is after all a willing party to it and has come in with consent and has "contracted" out part of its sovereignty.  Critics would nevertheless say that the issue of how much this "consent" is free or driven by 'circumstances" is debatable. 


Nevertheless, the Dispute Settlement mechanism (DSM) is another example wherein a rule based system overpowers power relations. In the DSM a developing country can win a case against an influential developed country which could result in a "domestic" policy choice of a developed country being overturned. Ofcourse there are issues on the efficacy and efficiency of the remedies under the DSM, but it is recognised that it is one of the cornerstones of the WTO. Well, coming back to the question - does the WTO restrict domestic policy independence. The answer is perhaps a yes and a no? We need to tread the middle path once again?

WTO, labour standards and public morals

 
(Courtesy:Two young Bolivian girls give a piglet a bath before dressing him for dinner. / United Nations Photo / Jean Pierre Laffont.)


The issue of linking labour standards to international trade is a contentious one. The proponents of universal international labour standards and enforcement through international trade agreements argue that lower labour standards, including child labour, creates an unfair advantage to the countries using them and results in cheaper goods entering their markets endangering their products as well as labour. They argue that similar labour standards must be implemented across to avoid unfair competition and trade and propose that countries should be allowed to impose trade barriers when labour standards are not followed. The opponents of this view argue that labour standards are the domain of domestic governments and should not be linked to enforceable international trade agreements. While accepting that improvements in standards of labour is a compelling prerogative for countries its linkage to trade is a veiled attempt at protectionism by the developed world to protect their products and labour. They oppose any linkage with international trade and argue that the WTO  is no the right forum to take up this issue. I had blogged about child labour and trade issues in earlier blog posts here  and here .

The Boston Review  carried a piece  on this issue titled "Hype or Help - Globalisation and the fight over labor standards". It argued that the fight for better labour standards by the developed world would actually not benefit it to the extent that is normally believed.

" Now the issue of labor standards has become economically more momentous and politically murkier. The importance of the economic issue has grown in proportion to the exploding income gap between the world’s rich countries in the “North” and poor countries in the “South.” In the nineteenth century the divide in per capita income between England and its emulators was roughly 2:1. Today the comparable distance between the United States and the average developing country is on the order of 25:1. At the same time, technology and foreign investment are flowing more freely than ever from North to South, thereby evening out international differences in output per worker. As a result, employers can now hire high productivity labor in the South, at relatively low wages. And that represents a threat to the living standards of Northern workers.

This threat has mixed up the politics of labor standards. Conservative views about labor standards have remained the same—they propose to let the compensation of labor be fixed by market forces. But a geographical division has developed between the South and “progressive” or “internationalist” labor advocates in the North (mainly the United States). These advocates note the two-decade-long stagnation of real wages in the United States, and argue that important causes of that stagnation are low wages (in relation to productivity) and minimalist labor standards in late-industrializing, Southern countries. To revitalize wages in the North, they propose a more militant posture towards labor standards in late-industrializing countries, and urge that that posture be implemented through trade agreements. Such agreements would make access to Northern markets by companies located in the South contingent on sharp improvements in Southern labor standards.

                    ...

Are these arguments for tougher Southern labor standards compelling, or are they—as critics argue—a thin veil for protectionism? Should progressives in the South accept them, or be placed in the awkward position of resisting higher labor standards? To answer these questions, we need to be clear about the the kinds of labor standards in question. In particular, the issue is not health and safety conditions, and the right of Southern workers to be treated like human beings—not to be murdered for organizing unions, for example. These rights are inviolate, and must continue to be fought for through diplomatic channels, such organizations as the ILO, and popular protest. Rather, the standards in question focus on rates of pay—for example, minimum wage regulations, or requirements that wage increases be linked closely to productivity growth."

Arguing that the new form of globalism does not really benefit the view held by the proponents of universal international standards enforcement through international trade agreements, the article concludes:

"Against the background of this particular form of globalism, the demand for tighter labor standards in the South as a way to protect workers in the North is not only likely to harm the South but is also likely to be weak tea in the North. While demands by Northern progressives and labor activists for international income redistribution may be politically attractive with the home team, they are no substitute for aggressive policies in favor of economic expansion. Unless the growth of the global economy accelerates—as it did in the late 19th century —the problems posed by low-wage Southern competition to Northern workers promise to be enormous" 

It would be interesting to see the debate in the context of existing  WTO Agreements. Article XX (General Exceptions) of the GATT  provides countries to take certain measures under specific circumstances to further certain public policy goals. Article XX (a) is as follows:

"Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:

(a)      necessary to protect public morals;"

Can the universalisation of labour standards be argued from a standpoint of public morals? Let us take an example of a developed country which is impacted by cheaper goods from a developing country where labour standards are less stringent than its own. Can the developed country legislate banning products of countries which do not follow a certain labour standard on the grounds that using such labour standards goes against its "public morals" as it considers a certain degree of labour standards as necessary and moral. Though it would not violate the "national treatment" principle as goods produced within the developed country too must follow similar standards, is it a disguised restriction on international trade? Does it constitute veiled protectionism? Can the "public moral" standard be used to impact processes, in this case labour standards,  outside one's country? 

Technology and Globalisation

I came across a reference to this book on globalisation which is not generally about the issues of globalisation that is discussed in terms of integration, supply chains and domestic policies furthering trade. It is about the technologies that propel globalisation primarily Diesel Engines and Gas Turbines. In the debates around globalisation we often forget the technologies that drive them!