A common issue in international trade is the deleterious effects of
discriminatory health and safety standards. The idea is that one
government can specify a standard that cannot be met by those outside
the borders. The classic example is that of northeast butchers seeking
to prevent the import of beef from western states made possible by the
advent of refrigeration. Massachusetts, New York, and Pennsylvania, for
example, required that meat sold within their borders be inspected by
local authorities. The Commerce Clause of the US Constitution prevents
such policies when they obstruct interstate trade. Another example is
that of Thailand, which forbid the sale of American cigarettes on the
grounds of health and safety, when domestically produced cigarettes,
which were no safer, were permitted.
This has Ricardian implications, it seems. The
potential elements of comparative advantage are myriad, but one argument
is that these elements include labor force preferences. Specifically,
that different working-condition standards provide opportunities for
some nations to gain comparative advantage over other nations.
It could be argued that a nation, by allowing poor
working conditions, is providing an implicit subsidy, especially to
labor-intensive industries.
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