Who Really Wins?
An interesting report was released recently by two national trade associations that represent manufacturing companies. The report summarized a survey of U.
An interesting report was released recently by two national trade associations that represent manufacturing companies. The report summarized a survey of U.S. companies with overseas operations (have factories in developing countries, that is) and the impact these operations have on the ethical, labor and environmental standards in the host countries. The main conclusions are that these companies follow standards that are higher than the norm in those developing countries, that these higher standards have a positive effect on local companies (which tend to raise their standards to approach those of the American companies) and that this influence is more effective than attempts to force improvements by imposing trade sanctions.
In ethical matters, for example, almost all of the U.S. companies surveyed have codes of conduct that forbid corrupt practices such as bribery or gift giving.
In labor practices, the majority of the companies have standards regarding child labor, nondiscrimination in hiring, health and safety, even wages and other compensation that are higher than the local norm. The surveyed showed that the U.S. companies tended to train and promote employees from the host country.
Likewise, a high percentage of the U.S. companies followed environmental standards that met or, in most cases, exceeded local standards and and were working to improve environmental performance.
In short, the report is rather convincing that workers in a developing country are better off working in a factory operated by a U.S. company than in other factories. The factories of U.S. companies are also, it seems, better neighbors to the local community. The report also suggests that these overseas operations have helped promote American values and interests in developing countries, fostering greater respect for human rights and democracy and raising standards of living.
The trade associations are using the study to make these points: Liberalized trade policies are good because they make the world a better place (that is, more like the United States). Trade sanctions are bad because they don't improve conditions overseas very well and are really protectionist measures in disguise. But there is another underlying message that sneaks in. Because U.S. companies are exporting their high labor and environmental standards to developing countries, it's just fine when they take manufacturing jobs overseas.
That's a message that should not go unchallenged.
