AEI panel discussion about FTAs in the aftermath of the bipartisan deal

In the aftermath of the bipartisan deal between the Democrats and the Bush Administration, the question is whether the new enforceable environmental and ILO labor standards that are included in FTAs are the tipping point where they are overstretching into domestic affairs. Yesterday, AEI held an interesting panel discussion about this called “The Bipartisan Trade Bargain: Is the Deal Worth It?”

According to Jack K. Veroneau, deputy United States trade representative, the answer is no. We had the same discussion when the Jordan FTA was negotiated in which both the US and Jordan committed themselves to enforce domestic laws. This was not the end of the world as many conservative commentators contended, and so will these provisions not be a problem. We need the labor provisions to offset disruptive effects of the otherwise benign globalization.

Phil Levy, policy analyst at AEI, emphasized the creation of wealth and economic development as determinative for improving both labor and environmental standards. Countries simply have, and should have since they are in radically different economic situations, different views on what the appropriate standards are. This agreement has, according to Mr Levy, clearly gone too far.

Levy seemed much more aware of the problems of going down the line too far. If the new provisions are not the tipping point, then where is it? When we are obliged to abide vague ILO standards, will it ever stop? How much free trade can we sacrifice for the sake of simply trade? I’ll update this post tomorrow with opinions from the last panelists.