Compliance with environmental regulations usually represents far too small a part of a project's total cost to influence most international investment decisions, which are dictated by the availability of resources, labor, capital, communications, transport and, above all, markets. But the evidence suggests that where investment has gone into new export industries in Mexico it has generally led to higher wages and improved working conditions. Researchers at the Organization for Economic Cooperation and Development have concluded that the respect or nonrespect of basic labor standards, like the right of assembly and collective bargaining, does not play a significant role in shaping trade performance. It is true that some highly labor-intensive industries, like clothing, shoes and toys, migrate from country to country in search of the cheapest labor costs. But it makes perfect economic sense for each country to support industries that best reflect its level of development.
Experience suggests that the best way to improve conditions is through economic growth.
If developing countries want to be in a race, they should aim not for the bottom but for the top.