Negative effects of trade restrictions

Discuss About The Restrictions To Pressure Exporting Countries.

Primarily, trade restrictions are a protectionist measure. Predominantly, trade restrictions are ways to curtail the movement of products and services from one country to the other. Usually, trade limitations come in the form of tariffs, quotas, and embargos among others. Whereas such restrictions are intended to bring about some specific outcome, it is not always the case. Currently, the United States trade restriction move on Bangladesh as to its labor standards hasn’t borne much fruit five years later thus the assertion that they are not always effective. While trade restrictions are used to protect domestic industries from unfair competition from other countries and to promote universal human and labor rights, there are negative effects of such actions Notably, such restrictive trade practices interfere with national laws, standards thus raising questions of supremacy of national laws as to labor standards, causes loss of employment in affected industries and curtails global trade. There should be a harmonized and mutual recognition labor code globally. Generally, human rights are an integral part of labor rights and standards and should be upheld no matter the economic consequences.

Noteworthy, there are internationally approved labor standards to which all if not most countries are obligated to uphold. In the event of violations to the universal labor standards, countries subscribing to the international labor violations and other international instruments promoting fair and safe labor standards feel obligated to ethically address such violations (Bakhshi & Kerr 2009). Some international bodies have made it mandatory for its member states to uphold certain standards as to labor and human rights practices .Due to the need to uphold basic human and labor rights, the intervention of importing nations through trade embargos is ethically justifiable (World economic forum 2018).According to some ethical views, through trade restrictions countries might be forced to change their national values, interests in order to keep on doing business with the countries imposing the restrictions. For some people, trade restrictions interfere with domestic ways and standards of doing things thus is viewed as undermining sovereignty and national values of a given country (Skwik   N .d).Most countries, employers code of conduct, mandate employers to provide safe working conditions thus making such violations of labor codes ,unethical conduct.

Noteworthy, Ethics dictates that workers safety rights be implemented at the workplace and any violations as to that be compensated thus the justification for the imposition of some trade restrictions on some countries .The fact that an importing country holds various core labor standards makes it prone to expect the same from its trading partners which might be admirable in the sense that it promotes the labor and human rights .However ,on the other side of the coin, forcing implementation of certain rights on another country undermines its authority and maybe national values(Panagariya  N .d).Economically ,low  and unsafe labor standards are accompanied by low prices and exploitative practices thus prompting the need for trade restrictions .Unsafe and illegal working conditions  are productively inefficient. Such exploitative practices not only harm the health and safety of exploited workers but the industry performance in other countries (Globalization 101.org N. d).Exploitative labor practices are not only productively inefficient in an economic sense but it also gives exporting countries an unfair advantage over other countries.

International labor standards

Arguably, trade limitations can help by forcing countries enjoying unfair labor practices from benefiting from them at the expense of other countries with the same industries (Stern & Terell 2003).Also unfair trade practices are likely to make countries competitive on an unequal footing with the rest of the countries (Martin & Maskus 1999).Through labor standards implementation, countries are able to compete with their products on an equal level as opposed to otherwise. Bangladesh is likely to enjoy unfair economic merits due to its low production costs as compared to the United States of America thus the assertion that trade restrictions are justified from an economic comparative advantage point of view. Following the Obama government directive to Bangladesh on the implementation of worker safety rights is justified in the instant case .This is because the trade restrictions seeks to overcome Bangladesh’s short-sightedness of the harmful effects of the unhealthy working conditions for its workers and that the current working conditions only benefit the employers at the expense of workers’ rights and the rest of the economy.

Majorly, trade restrictions are used to address special interests and to overcome short-sightedness in an economic context(Investopedia 2018).Due to the economic importance of the importing country (U.S) to the Bangladesh economy, trade restrictions are persuasive thus the importance of using trade limitations to effect social, economic and human rights changes(Greenhouse 2013).Susequently,trade restrictions might lead to massive employment opportunities.Specifically,2/3 of Bangladesh companies had to close down their operations following the  U.S. imposed Quota restrictions(Follet 2017).This goes to show that the imposition of trade restrictions can negatively impact on economic livelihood and the economy  of a country before things get better. Also, restrictive trade practices limit economic integration at the international level (Gerber 2017).In an effort to harmonize its labor standards with that of Bangladesh, the United States of America opted to use a trade restriction. The restriction is aimed at motivating the Bangladesh government into enforcing labor standards similar to their as a harmonization tactic and a way of upholding workers right to safe working environment.

Also, harmonization of labor standards are a just cause to protect human and worker rights will encouraging collective product and worker standards for better performance. The desire to achieve a mutually recognized standard for products and labor is one of the reasons behind restricting trade relations between countries. Mutually recognized standards among different countries can strengthen trade relations between countries due to the mutually agreed upon standards of production and labor thus saving inspection time and making trade relations more efficient and effortless. Despite the advocating for trade restrictions on exporting countries, sometimes they are not effective in bringing about the desired economic change. As illustrated by the case of Bangladesh Tazreen fire and Rana plaza building Collapse, the Bangladesh safety worker rights have not changed despite the imposed trade restriction by the American government (Prentice & Neve 2017).The effectiveness of the restriction is yet to be fully realized thus it’s a challenge to affected workers. Due to the fact that Human lives are irreplaceable thus the need to safeguard their existence despite the economic cost that exporting countries might endure in the changing process.

Ethical justifiability of trade embargos

Whereas protectionist measures might be effective in steering social change and economic gains over time, it might be costly for the countries whose trading relations have been curtailed by the restrictive directive .Also, the effectiveness of restrictive practices on countries slow down the globalization process which is encouraged by trade among different countries. The effectiveness of the protectionist measures lie with the political and economic will of the exporting country thus it is not enough that restrictive measures are imposed onto exporting countries by their trading partners. The harmonization of labor standards is a vital steps towards promoting efficient globalized trade while strengthening labor and trade relations among different global countries. The fact that the implementation of revised labor standards might take a while makes the economic performance of the exporting countries go down due to the fact that the labor task force will be affected by layoffs as employers try to raise their labor standards if any .Labor rights are as crucial as human rights thus the need for the adoption and implementation of universal labor codes of conduct.

Conclusion

As to whether trade restrictive practices should be imposed on exporting countries, my answer is definitely yes. Due to the negative impacts of lower labor standards to individual workers lose their health, lives all for the benefits of a few employers isn’t ethically and economically productive. Typically, low standards of labor affect the rest of the economy negatively, by being productivity inefficient might lead to low quality production of goods, unsafe working conditions for the workers leading to deaths and illnesses thus reducing the working labor market population and providing unfair trading advantage to other country’s industries. The only winner in the economy is the employers and the government through revenue and taxation respectively. Low labor standards lead to productivity inefficiency which isn’t a gain economically. Also, lower labor standards denies countries a level competitive advantage which isn’t ideal for the global competitive economy .Usually, restrictive practices are implemented to protect domestic industries from adverse competition from other countries and to uphold human and labor rights as was the case in the Bangladesh case. Overall, protectionist measures such as trade restrictions should be enforced dependent on the special circumstances of the country to which they are imposed.

Essentially, the effectiveness of these restrictive trade practices lies within the exporting nation’s jurisdictions thus making it hard to enforce the changes for which the trade restriction was issued. To me, human rights and labor standards ought to be universally upheld despite the national laws. Economic gains should not overshadow the human rights and dignity though exploitative trade practices and unsafe working conditions.

References

Bakshi, S & Kerr, A.W. (2009).Labor standards as a justification for trade barriers: Consumer concerns, protectionism and the Evidence. University of Saskatchewan. [Online].Available at https://www.uoguelph.ca/catprn/PDF-Pres/Presentation_2009_Bakhshi-Kerr_CAES.pdf[Accessed 17 May 2018]

Follet, C., “Restricting trade after factory explosion would hurt Bangladeshi women”, management, October 17, 2013.

Gerber, J. (2017).International Economics. (7^th edition).Pearson.

Gloalization101.Org. (N .d).Trade and international labor standards.Globalization101.Org. [Online].Available at https://www.globalization101.org/trade-and-international-labor-standards/[Accessed 17 May 2018]

Greenhouse, S. “Obama to suspend trade privileges with Bangladesh”, The New York Times, June 27, .Available at https://www.nytimes.com/2013/06/28/business/us-to-suspend-trade-privileges-with-bangladesh-officials-say.html[Accessed 17 May 2018]

Investopedia. (2018).Trade restrictions. Investopedia. [Online].Available at https://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/trade-restrictions.asp[Accessed 17 May 2018]

Martin, W & Maskus, E. K, (1999).Core labor standards and competitiveness: Implications for Global Trade Policy. University of Colorado. [Online].Available at https://www.colorado.edu/Economics/mcguire/workingpapers/clsriefinal.doc[Accessed 17 May 2018]

Panagariya, A. (N .d).Labor standards and Trade sanctions: Right end wrong means .Colombia University. [Online].Available at https://www.columbia.edu/~ap2231/Policy%20Papers/Hawaii3-AP.pdf[Accessed17 May 2018]

Prentice, R. & De Neve, G. “Five years after deadly factory fire, Bangladesh’s garment workers are still vulnerable”, The Conversation. November 23. Available at https://theconversation.com/five-years-after-deadly-factory-fire-bangladeshs-garment-workers-are-still-vulnerable-88027[Accessed 17 May 2018]

Skwik.9N.d).Ethics of international trade. Skwirk.Com. [Online].Available at https://www.skwirk.com/p-c_s-58_u-488_t-1330_c-5116/ethical-issues-of-international-trade/wa/transnational-corporations/[Accessed 17 May 2018]

Stern, M.R & Terell, Business-law (2003).Labor standards and the world trade organization .University of Michigan .[Online].Available at https://www.wto.org/english/forums_e/ngo_e/labor_standards_e.doc[Accessed 17 May 2018]

World Economic Forum (2018).Globalization got stuck in the 20th century: Here’s what it should be like in the 21^st century.Forbes.com [Online].Available at https://www.forbes.com/sites/worldeconomicforum/2018/01/17/globalization-got-stuck-in-the-20th-century-heres-what-it-should-look-like-in-the-21st-century/#18aa10619a98 [Accessed 17 May 2018]