Thursday 02 Apr 2020 | 22:22 | SYDNEY
Thursday 02 Apr 2020 | 22:22 | SYDNEY

Is it protectionist to object to child labour?


Mark Thirlwell

9 December 2008 07:38

There is a long-standing argument regarding the role of labour standards in trade policy, and recent news that the UK has been buying surgical instruments manufactured by child labour is just the latest example. It is also an example of yet another issue where economists and public opinion tend to diverge quite sharply. 

While many developed-country voters seem to think that considerations of labour standards should play an important role in international trade regimes, most trade economists have tended to be quite hostile to demands to include labour standards in trade agreements, arguing that they are little more than disguised protectionism, their main motivation 'not altruism and empathy, but fear and self-interest'. 

Yet while some demands to include labour standards in trade deals – particularly those that focus on low wages and take no account of international productivity differences – quite clearly fall into the ‘disguised protectionism’ category, surely it can’t be a bad policy to restrict trade that is based on child labour? Certainly there is some evidence that rich-country objections to child labour are motivated not by narrow economic self-interest, as the cynical economists might have it, but rather by an ethical sense that the practice is wrong. 

Unfortunately, while a policy that sought to ban exports based on child labour might well be motivated by the best of reasons, it still might be bad policy. For a start, what if the earnings of these child workers are vital to the survival of the children themselves, and their families? Removing their source of income without first providing an adequate replacement could dramatically worsen an already desperate situation.  Alternatively, it could force at least some of the children displaced from the export sector into even more harmful alternative occupations. So trade economists’ long-standing reluctance to accept the inclusion of labour standards in trade agreements – even in the case of child labour – is far from being as callous as it might first appear.

Still, I wonder whether the effective exclusion of labour standards from trade regimes will continue to survive globalisation (assuming of course that the latter survives the current financial crisis). Australians have been told that as international economic integration continues, they should get used to treating the purchase of goods and services from outside Australia’s borders in much the same way as they would view the purchase of goods and services from across state borders. To do otherwise, they are lectured, is to surrender to economic irrationality or even xenophobia.  

Yet one reason Australians in (say) NSW are happy to buy products from (say) Victoria is that they are happy with the degree of labour protection on offer: they can feel reasonably comfortable that their Victorian ‘imports’ are not the product of child labour or some other practice that they are deeply uncomfortable with. So why, they might ask, if they are now expected to treat all imports equally, regardless of source, should they not expect all imports to be subject to the same kinds of standards? 

As already suggested, there are at least some defensible answers to this question. Nevertheless, it is not an unreasonable question to raise and it is one that I suspect policymakers will find themselves struggling with even more as international economic integration deepens.