When the environmental costs of producing a product are passed on to the larger society, this constitutes a form of subsidy by the society to the producer. When a country requires that environmental costs be internalized in prices, this is a step toward greater economic efficiency. However, when a country with policies that support this form of economic discipline engages in free trade with one that does not, the tendency will be for more and more production to shift to the latter. This reduces economic efficiency and should be resisted as vigorously as the protection of inefficient national monopolies. Free trade also has enormous consequences for the standards a society choses for itself that must be treated separately from questions of pure economic efficiency.
Standards regarding the distribution of income exemplify the issue.
In fact, it is the laboring class, which in the United States has already suffered a seventeen percent decline in real wages since 1973. Lower wages mean that returns to those who own capital in all three countries will go up. In reality the workers in the United States and Canada will not be sharing their declining wages with underpaid Mexican workers so much as with the owners of capital. We have come to speak of global competition as a major value. Eighty percent of the U.S. labor force is classed as non-supervisory employees.