I’m no cheese connoisseur.  I’m usually happy with American or provolone, and I’ll even go for that Philly favorite, Cheese Whiz.  But I understand that some people have more refined tastes, and they feel very strongly about the issue.  And they get very upset when their favorite cheese is taken away. The Washington Post reports on a recent instance of this:

For centuries, microscopic mites have been part of the process for making Mimolette, a mild-tasting cheese shaped like a cannonball and electric orange in color. For decades, the cheese has been imported from France and distributed to shops and grocery stores across the United States.

That is, until this spring, when the Food and Drug Administration began blocking shipments of the Gouda-like product at U.S. ports, leaving thousands of pounds of it stranded in warehouses from New Jersey to California.

The FDA says inspectors found too many cheese mites per square inch crawling on the cantaloupe-like rinds of Mimolette, raising health concerns. But it hasn’t explained exactly why it began holding up the cheese shipments after decades of relatively few problems. “The only thing we can do is cite our regulations, which show very clearly that our job is to protect the food supply,” FDA spokeswoman Patricia El-Hinnawy said.

As I noted yesterday, the Obama administration has suspended Bangladesh from the list of poor countries that receive preferential tariff treatment in the United States, citing concerns over workplace safety and inadequate labor laws. The vast majority of imports from Bangladesh will not be affected because apparel goods were already exempt from the program. But some tariffs will go up and the human cost of these new taxes is very real. 

The Wall Street Journal’s coverage of yesterday’s announcement includes this anecdote:

Higher porcelain duties will put a strain on the business of Ian Zucker, chief executive of 10 Strawberry Street in Denver, who imports dinnerware from Bangladesh for Bloomingdale’s, Wal-Mart and others.

“After the tariff goes in, I have to raise my prices 20 percent,” he said in an interview. “You think Wal-Mart’s going to say that’s OK?”

Mr. Zucker said he is likely to turn to China or Sri Lanka for dinnerware products, the making of which is labor-intensive, making countries with low wages especially attractive.

I wonder if the administration thinks it will get a thank-you card from unemployed Bangladeshi dinnerware makers now that they’re no longer being “exploited” by Western investors looking for low-wage labor.

It is widely expected that the Obama Administration will act today to suspend Bangladesh from the Generalized System of Preferences (GSP) program in response to a complaint from U.S. labor unions. Under the GSP program, some imports from some low-income countries can enter the U.S. market without paying tariffs. (Sallie James has done excellent work describing the pros and cons of this policy from a free trade perspective). Supporters of the suspension point to recent deadly industrial accidents to argue that Bangladesh needs stronger labor laws before being allowed to benefit from GSP tariff rates. In truth though, suspending Bangladesh from the program has zero chance of improving working conditions or wages in Bangladesh.

First off, less than 1 percent of Bangladesh exports to the United States currently enjoy low tariff treatment under the program. The vast majority of the $5 billion worth of Bangladeshi goods entering the United States every year are apparel products, which are exempt from GSP and have always faced steep tariffs. In other words, revoking GSP access is not a very big stick to use to get Bangladesh to change its labor laws.

Second, if access to the U.S market through the GSP program is meant to help Bangladesh, wouldn’t revoking that access harm Bangladesh? Indeed, the success of the suspension depends on it. Proponents of the suspension claim that increasing tariffs will prompt the Bangladeshi government to change its laws. This logic depends on the premise that policymakers in Dhaka are less attached to their domestic labor laws than they are to preferential access to the U.S. market. Considering how small of an impact the suspension will have on the Bangladesh economy, this premise is highly questionable. In the meantime, U.S. trade barriers will be working to prevent the development of more industries in Bangladesh.

Finally, even if the suspension is only temporary and successfully meets its goals of encouraging new labor laws, the fact remains that most people in Bangladesh will not benefit from more restrictive labor policies. Sweatshop conditions in the developing world are often shocking to Western consumers, but employment in the garment industry offers an unprecedented level of opportunity for millions of people. This is especially true for women looking for personal independence and wealth they could never find in traditional, agricultural society. Approximately 80 percent of Bangladesh’s four million garment workers are women.

Raising tariffs to promote labor restrictions is exactly the opposite of a good policy. Employment restrictions increase the cost of hiring labor. In doing so they are sure to decrease investment. Access to foreign capital and global consumer markets, on the other hand, increases the value of Bangladeshi labor.  Greater productivity per capita will empower workers to demand higher wages and better working conditions. Removing the bottom rungs is not going to help anyone climb a ladder, but open trade and investment will give more people in Bangladesh the strength to pull themselves out of poverty.