U.S. Corporations: Keeping the Wages Flat

Fair trade advocates have long called for stronger labor standards in trade agreements. It's worth taking a look at who actually opposes such standards and who is for them. The good people over at Global Labor Strategies have just issued a new report, "Undue Influence," which examines this topic head-on as it plays out in China. Almost exactly a year ago, the Chinese government put forward a series of proposals to reform labor laws that, while far from being ideal, represented a step forward for worker's rights. Almost immediately, U.S. multinationals began to actively undermine the government's efforts - the American Chamber of Commerce in Shanghai even made a veiled threat that the law would lead to divestment from China as it would "negatively impact the PRC's competitiveness" (translation: Chinese wages might rise a little!).

Now, remember that normally we hear from the pontificating class in the U.S. that labor standards are an imposition that will harm poor countries' ability to develop. Yet here we have the government of a developing country push for strengthened labor rights with backing from citizens in that country and the people opposing it are U.S. multinationals (a similar situation happened in Peru where former President Toledo pushed for stronger labor provisions in the Peru-US FTA and was rebuked by the administration). So the next time you hear someone preach about the dangers of putting "standards" into trade agreements because they would harm people in developing countries, remind them who really supports and opposes that stance.