Joe Stiglitz wants the World Trade Organization to label the United States’ non-participation in the Kyoto Protocol a “hidden subsidy” and allow countries to impose a countervailing duty on US energy-intensive exports.
I fear that once the litigation gates open, “hidden subsidy” will be a phrase that lawyers and protectionists love. Is the absence of labor standards in developing countries a “hidden subsidy” to exporters of labor-intensive manufactures? Is loose anti-trust enforcement a subsidy to exporters in industries with economies of scale? How are we to think about the costs of mandating or providing or failing to mandate various benefits to employees? Costs are subjective; social costs doubly so.
“One of the main purposes of the WTO is to create a level playing field,” says Stiglitz in Making Globalization Work. His previous book, Fair Trade For All, gave me the impression that the WTO has never sought such a goal.