Of all the debates surrounding globalization, one of the most contentious involves trade and workers’ rights.
Proponents of workers’ rights argue that trading nations should be held to strict labor standards—and they offer two quite different justifications for their view. The first is a moral argument whose premise is that many labor standards, such as freedom of association and the prohibition of forced labor, protect basic human rights. Foreign nations that wish to be granted free access to the world’s biggest and richest markets should be required to observe fundamental human values, including labor rights. In short, the lure of market access to the United States and the European Union should be used to expand the domain of human rights.
The key consideration here is the efficacy of labor standards policies. Will they improve human rights among would-be trading partners? Or will they slow progress toward human rights by keeping politically powerless workers mired in poverty? Some countries, including China, might reject otherwise appealing trade deals that contain enforceable labor standards. By insisting on tough labor standards, the wealthy democracies could lay claim to the moral high ground. But they might have to forgo a trade pact that could help their own producers and consumers while boosting the incomes and political power of impoverished Chinese workers.
The second argument for strict labor standards stresses not the welfare of poor workers, but simple economic self-interest. A trading partner that fails to enforce basic protections for its workers can gain an unfair trade advantage, boosting its market competitiveness against countries with stronger labor safeguards. Including labor standards in trade deals can encourage countries in a free trade zone to maintain worker protections rather than abandoning them in a race to the bottom. If each country must observe a common set of minimum standards, member countries can offer and enforce worker protections at a more nearly optimal level. This second argument, unlike the first, can be assessed with economic theory and evidence.