Combining Public and Private Measures of Social Compliance?

To achieve solidarity with southern commodity producers, in addition to supporting individual campaigns, northern activists have advocated two macro approaches: trade conditionality and third-party-monitored ethical codes. This paper assesses the potentiality of their combination. Trade Office review of labor rights under the U.S.Generalized System of Preferences has given way to multilateral mechanisms. For example, the NAFTA labor accord allows ministerial consultations regarding child labor and health/safety violations of national laws (CAFTA contains even weaker mechanisms). On the other hand, Fair Trade labeling has competitively strengthened ethical sourcing by offering consumer choices beyond corporate code approbation like SA8000 and the Rainforest Alliance frog. Nevertheless, there are economic and social limitations to such private approaches. They only offer periodic assessments; they do not fully resolve labor representation; they are subject to both image and market manipulation (even more so in an economic downturn), and they may discourage local legal enforcement. The paper then considers whether limited multilateral public trade regulation may be able to overcome some of these drawbacks.