May 12, 2005

Better Sweatshops

Cambodia has been one of the most encouraging global stories over the last few years. Not because it's a model country—far, far from it—but because it's a developing nation that embraced higher labor standards and still managed to stay afloat in the global marketplace. Way back in 1999, the United States signed an experimental trade agreement with Cambodia, in which U.S. quotas on Cambodian garment imports depended on improved working conditions in the local factories. More reform meant more shirts and shoes that could be sold in America. And it worked! Cambodian garment workers got to unionize, got better working conditions, pay increases, and the country still attracted foreign investment. Cambodia may even weather the coming storm of cheap Chinese garments about to flood the world market.

Part of this is because companies that desperately need good publicity, like Gap and Nike, have been flocking to Cambodia. Which all reinforces the oddly paradoxical thesis, often touted by free-trader Jagdish Bhagwati, that most anti-globalization activists are sorely misguided, and yet... and yet their loud, angry existence is one of the few reasons why "free trade" actually does lead to a rise in global labor standards—because companies are shamed into action. In other words, the activists refute themselves! Funny. This could also mean, however, that not every country in the world will be able to duplicate Cambodia's success. There are only so many companies that badly need better P.R. (As it happens, I still think other countries can raise their labor standards without losing foreign investment, just probably not by following the Cambodia model.)

Anyway, this New York Times story today lays out some of the details, and notes that Cambodia still has severe problems—rampant poverty in every other sector, official corruption, labor leaders turning up murdered—but the garment industry may be leading the way to reform. Like I said, far from perfect, but encouraging.
-- Brad Plumer 5:04 AM || ||