Question

Consider the following statement: Governments in industrial countries should use trade sanctions to enforce labor and environmental standards in developing countries. Do you agree or disagree with this statement? Explain. Need an answer in a minimum of 200-250 words.

Answer 1

Trade sanctions are a subcategory of economic sanctions, which are commercial and financial penalties imposed by one or more countries, and targeted against a country, organization, group, or individual.

Weak and poorly enforced labour standards in developing countries are said to be unjust to workers. Since weak labour standards are often accompanied by low wages, they are also said to harm workers in the developed countries who compete with developing country workers through trade and investment.

Many times the transnational corporations that control the means of production will shift their operations to the country with the lowest cost of production. Lower costs of production tend to be exploitative by nature as the bottom line is the main concern.

Developing country’s government and business man worry that those trade agreements that seek to raise labour standards will be manipulated for protectionist purposes that their exports will be blocked on the ground that their labour standards are not sufficiently acceptable when the true motivation is to protect uncompetitive firms in industrial countries.

Many developing country governments and economists also argue that the international pressure is to improve labour standards detracts from developing countries with only one big advantage a cheap supply of labour. They make the case that pressure to raise labour costs takes away from their comparative advantage, and that this pressure only benefits workers in rich countries.

Still others argue that trade sanctions are an imprecise and unwieldy means for improving developing country’s inferior labour conditions, which may often have complex economic and social causes.

They argue that labour conditions can best be improved over time by promoting development that improves productivity. By increasing the size of a nation’s labour force, economic trends tend to pull up wages and working conditions automatically.