Wto Blue-Green Blues: the Impact of U.S. Domestic Politics on Trade-Labor, Trade-Environment Linkages for the Wto's Future

Abstract:     
While scores of Western commentators criticize the non-transparency of the World Trade Organization (WTO) in their examination of “blue” trade-labor and “green” trade-environment issues, they often ignore the linkage between domestic politics in powerful states and international trade measures. Consciously or unconsciously, they blur this crucial linkage that divides WTO members and exacerbates conflicts and scuttles them to the WTO in the first place. Yet it is this underlying domestic-international, two-level game that also needs to be made more transparent, since its examination demonstrates that it is this nexus more than the WTO's lack of transparency that results in trade-environment and trade-labor conflicts.

This article makes two central points about debates over the WTO's treatment of trade-environment and trade-labor matters. First, the U.S. public is relatively government-averse and foreigner-wary. It is thus far less likely to support financing of domestic and international programs that directly address environmental and social concerns than to support trade restrictions against foreign imports. Trade restrictions against foreign imports impose costs on domestic constituents, but these costs are less transparent than the costs of positive social and environmental programs. Domestic politicians and the mass public therefore respond more favorably to critics' calls for trade restrictions against unrepresented foreigners. WTO critics employ the rhetoric of fighting “multinational corporations,” but the sanctions that they advocate can harm developing country workers, and these workers are rarely consulted about them. Positive assistance programs, on the other hand, are both more efficient and equitable. Yet whatever political party is in control, domestic political processes prefer to shift costs through trade restrictions onto foreigners who, in a world of asymmetric power, tend to come from poorer, smaller countries. The result is North-South trade-social policy controversies brought before the WTO on account of the United States' imposition of unilateral trade restrictions against developing country imports, as opposed to negotiated package agreements involving financial and technical assistance.

Second, domestic laissez-faire-oriented policies within the United States, whether concerning labor and social policy or environmental protection, should encourage further backlash against the WTO and the international trade liberalization policies that it facilitates. Although it is primarily these domestic policies that exacerbate income inequality within the United States, political processes more easily focus on trade liberalization as the culprit. To attempt to counter this backlash, trade-liberals could work with environmental and labor advocates to address their concerns through specific domestic and international environmental and social programs. This policy response, however, is constrained by U.S. domestic politics for the reasons just stated. Thus, should the United States continue to push for trade liberalization policies without more coherently addressing domestic and international environmental and social concerns, it should trigger further backlash against the international trading regime.

Part I of this article provides a brief overview of the dominant discourse on linkages, which focuses on whether WTO rules should be modified (or interpreted) to permit trade restrictions on environmental and labor rights grounds. Those fully familiar with the competing conventional approaches to trade-environment, trade-labor debates may either skim Part I or move directly to Part II. Parts II-V examine the political economy of trade-environment and trade-labor policy, particularly in the United States. Part II addresses the politics of trade-environment agenda setting and the reasons why U.S. critics more likely target their criticism on the WTO instead of environmental policy decisions made domestically. Part III turns to the trade-labor linkage, again assessing the domestic politics behind the predominant focus on trade restrictions. It examines the apparent paradox (at first blush) that the demand for binding WTO labor norms is strongest in the United States, which arguably offers the fewest labor and social protections in the developed world. Part IV briefly addresses what potentially could be accomplished multilaterally through better coordination of the roles of international trade, development and other economic institutions. Part V concludes about the nexus between U.S. domestic politics and the WTO's future development. The links between U.S. domestic politics and international trade-environment, trade-labor policy help compose the WTO's blue-green blues.

Keywords: International, International Economic Law, International Law, Transatlantic Relations, Comparative Law, Law & Society

JEL Classifications: K00, K33, K23

Accepted Paper Series