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I agree with Sir K. Knocking down all trade barriers assumes that standards of production are the same everywhere. They aren't. Without trade barriers, our higher EPA rules here are actually working against our companies, as are higher labor laws. Given an even playing field otherwise, these two externalities act as a surcharge the companies must pay here. So, the companies move to Mexico or close down in bankruptcy.
However, the WTO/GATT does not have a "side agreement" on labor an environmental exceptions. It DOES have one on health exceptions -- and it could be argued environmental are inlcuded therein (but that has generally failed before the DSB). The people I've worked with from the WTO admit these externalities are an issue, but insist it is not within their purview to address them until the parties to the WTO/GATT tell them to -- which seems like a reasonable stance.
Umm... I think I should just start making a catch-all WTO/GATT thread and link it when it crops up from time to time.
Oh, and another thing the WTO/GATT does not address is "dumping" -- selling your wares below cost in a neighboring nation just to drive out competition. NAFTA does address this. If it was Mexico selling steel that cheap in the US, it would be having to demonstrate it was not dumping the stuff under the anti-dumping provisions.
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