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Free trade can lead to a "race to the bottom" in which industry moves to the country with the lowest taxation, lowest environmental standards, worst treatment o
by bloak 3y ago
Free trade can lead to a "race to the bottom" in which industry moves to the country with the lowest taxation, lowest environmental standards, worst treatment of employees, worst data protection, etc. and so other countries are encouraged to similarly drop their standards and everything gets worse for almost everyone, arguably, at least in some cases (probably no one would claim that free trade is a bad thing in all cases).
In the case of environmental standards free trade between countries that do not have the same rules and standards makes it harder to prevent a "tragedy of the commons": I think that's another way of looking at it.
Probably an economist could give a better answer.
- hedora 3y agoThat's often used to justify tariffs, but the argument does not stand up to scrutiny. I've never heard of a tariff that is based on embodied carbon, percentage of slave labor that went into production of the good, or so on. Such tariffs would address the issues you are talking about (and also eliminate a significant percentage of global political corruption), but I think they're actually in violation of international law.
- MagnumOpus 3y agoThe EU’s new CBAM is a tariff that is based on embodied carbon. All other tariffs aren’t - they are protectionist measures aimed at increasing domestic employment.
- Hermitian909 3y ago> I've never heard of a tariff that is based on embodied carbon, percentage of slave labor that went into production of the good, or so on. The inherent assumption here is that a trusted body can be established for a reasonable price that will accurately report these numbers so that the tariff can be enforced. This is a bad assumption both because of practical difficulties in many countries (try this in the DRC) and because one must often assume that the trading government is willing to subvert these tariffs. In practice, the only practical solution is usually a flat tariff paired with diplomacy stating that the condition to revisit the tariff is building trust that these standards will be enforced on both sides.
- brutusborn 3y agoThere must be a mechanism to do so for the EUs carbon based tariff. For countries like the DNC, you could just assume they are not in compliance and apply the full tariff.