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Always some baseline level of standards. Always.


When people talk about setting standards in the global economy, they tend to imagine one country leaning on another country, or some multilateral trade organization leaning on a member country. But that sort of thing hasn't proved all that successful. This sort of thing, however, is probably going to become more and more important.

Wal-Mart has more than 10,000 suppliers in China. In addition, about a million farmers supply produce to the company's 281 stores in China. If Wal-Mart were a sovereign nation, it would be China's fifth- or sixth-largest export market. So the company hopes that small measures taken by all suppliers start to add up. Its 200 biggest suppliers in China have already trimmed 5 percent of their energy use.[...]

In October 2008, Wal-Mart held a conference in Beijing for a thousand of its biggest suppliers to urge them to pay attention not only to price but also to "sustainability," which has become a touchstone for many companies.

"For those who may still be on the sidelines, I want to be direct," Wal-Mart chief executive Lee Scott said sternly. "Meeting social and environmental standards is not optional. I firmly believe that a company that cheats on overtime and on the age of its labor, that dumps its scraps and its chemicals in our rivers, that does not pay its taxes or honor its contracts will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Wal-Mart."

There aren't many Wal-Marts out there, of course. But as Barry Lynn argues in his new book, there are a lot of smaller companies that are nevertheless international monopolists and that countries desperately want operating inside their borders. That makes those corporations powerful on their own and powerful as tools of international trade policy. The political conversation doesn't quite know how to talk about them yet, but they're probably the most important levers here.

Photo credit: Joshua Lott/Reuters.

By Ezra Klein  |  March 5, 2010; 2:52 PM ET
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That's weird. I thought the key to WalMart's low prices was volume. I mean, that's what Obama recently suggested when he was explaining some points of healthcare reform.

Posted by: cpurick | March 5, 2010 3:17 PM | Report abuse

Lomiallor is right! You are a Republican shill. Good things to say about Wal-Mart? For any reason? You've been co-opted by the corporatists, Ezra. Soon you'll be on Fox News, and it's all going to be over.

And the key to Wal-Marts low-prices is mercilessly putting the screws to its vendors. Which is good for the consumer, but not so much for its vendors, which the frequently price-down (and return merchandise) to the point of bankruptcy.

That being said, Kudos to Wal-Mart for attempting to pressure China to behave a little less badly. The UN can bloviate all it wants, and so can diplomats, but money makes things happen.

Posted by: Kevin_Willis | March 5, 2010 3:55 PM | Report abuse

This sort of thing might even make the world a better place -- but what happened to citizenship, to democracy itself? Are we only consumers? Some of us don't like that idea and would regulate the corporate behemoths enough to give individuals some residual power.

Posted by: janinsanfran | March 5, 2010 4:34 PM | Report abuse

And this is why we need to create a regulatory state that gives Walmart and other multinationals large incentives to 1)use renewable resources 2) pay living wages 3) uphold basic human rights of employees and 4) use suppliers that meet these requirements. Sadly, U.S. law does that very rarely.

Posted by: Levijohn | March 5, 2010 6:31 PM | Report abuse

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