- The Washington Times - Sunday, July 29, 2001

The late-20th century tsunami of free trade, which contributed so much to global prosperity after World War II, has been effectively stopped in its tracks in the United States by an alliance of labor and environmental activists claiming that globalization is nothing but a "race to the bottom."

The same protesters last seen in Quebec and Seattle are now busily organizing a campaign to deny President Bush the Trade Promotion Authority (TPA) he needs from Congress to negotiate new trade agreements.

Their principal argument: U.S. manufacturers' modus operandi is to exploit the cheapest available labor in countries with the lowest environmental standards.

A closer look at what American companies really do when they manufacture abroad belies that claim. Far from "racing to the bottom," U.S. manufacturers generally take their high domestic standards with them when they operate overseas, and in doing so are far more likely to raise not lower labor, ethical and environmental standards. At the same time, they help create the prosperity that allows democracy and human rights to flourish. Workers and government officials in the developing world are well aware of this, which is why they compete intensely for American investment and very rarely join in protest marches against it.

As a purely business matter, there's an elementary logic at work here. Productivity is the key to global competitiveness, and the most productive manufacturers are those with the most seamless operations. It doesn't make business sense nor does it save money to use different standards between factories just because they're in different countries. Moreover, there are countless journalists and private groups that monitor corporate behavior closely, and can and do inflict serious public relations damage on companies they deem irresponsible.

A joint survey released recently by the National Association of Manufacturers and the Manufacturing Alliance/MAPI examined 44 companies of varying sizes, with production facilities in 42 developing countries. It is the first systematic look at the management techniques of North American-based companies operating abroad. What the study found was that, despite the occasional exceptions that one finds in every field of human endeavor, these companies overwhelmingly maintain consistently high standards with regard to workers' rights, the environment, and ethical conduct.

Labor: Nine out of 10 respondent companies reported maintaining higher health and safety standards in their plants than in those owned by local competitors. Nearly three-quarters listed policies of nondiscrimination in hiring, and 61 percent offer training programs for their foreign workers.

To cite a few examples among many: Jockey International employs both internal compliance managers and outside auditors to ensure compliance with child labor laws in developing countries. Becton Dickinson, a leading maker of medical equipment, has a policy of nondiscrimination in labor practices that allows its 25,000 employees worldwide to file complaints with their corporate ethics office. Arch Chemicals' standards for hazardous exposure and professional qualifications related to health and safety are identical across the globe.

Environment: Seventy-eight percent of the companies responding maintain environmental management systems that contain measurable objectives and/or targets for improved environmental performance. More than two-thirds provide training in developing countries for improved environmental performance, and approximately the same ratio maintains corporate environmental standards for exports and investment in developing countries at the same level as for sales and production in the United States.

On the ground: Polaroid installs the same abatement equipment worldwide as in U.S. process lines. Fortune Brands, a leading sports equipment and beverage producer, developed state-of-the-art facilities in Mexico and Thailand with waste-treatment disposal systems that exceed local and in some cases even U.S. regulations. International Paper requires all its global facilities to identify potential environmental improvements through audit and corrective action plans.

Business ethics: Even more far-reaching is the impact of corporate ethical standards, which reflect values deeply embedded in American culture and are now being conveyed to developing countries via locally hired managers and employees.

Underlying all these factors is typically a combination of good business sense and a genuine belief in corporate responsibility to directly address basic human rights on a global basis.

Fully 95 percent of respondent companies have corporate codes of conduct, including anticorruption provisions, and 60 percent have training programs for managers in developing countries on ethics and good corporate practices.

More than two-thirds have codes with specific provisions for respecting individual rights like nondiscrimination in hiring, respect for individual dignity and personal integrity. And 80 percent even provide Internet access to overseas employees.

American Home Products, for example, requires that its code be signed by all salaried employees. ITT Industries Inc. requires all agents, consultants and representatives to comply with the same corporate code of conduct.

Since nearly 60 percent of respondent companies use foreign nationals for three-quarters or more of management positions, it would be difficult to overstate the impact of these programs. In places like China and Indonesia, what better way to export American values and build a solid base for democracy and respect for human rights?

These findings demonstrate a side of the U.S. business community that you're unlikely to see much about on the evening news or in a protest rally. Admittedly, the survey sample was limited, and more research is needed. But our report cites too many concrete examples of good business practices more than 300 in all to represent the exception rather than the rule.

You don't have to believe that all CEOs are angels to see why. Good business practices don't just soothe the conscience they help companies grow. They're essential to recruiting and retaining the best workers, who are the heart of any successful enterprise. In a brutally competitive global marketplace, where consumers are keenly attuned to price and image, good business practices can make the difference between winning and losing.

But many U.S. companies, particularly smaller ones, won't have the chance to show what they can do without increased access to world markets.

That's why Trade Promotion Authority for the White House is so important. It's not a favor to big business. In today's world. It's essential for America's continued economic growth.

Thomas J. Duesterberg and Jerry J. Jasinowski are the presidents of the Manufacturing Alliance/MAPI and the National Association of Manufacturers, respectively.

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