Idealism vs. Realism in FLT

Don't look now, but there's a black hole in the middle of the forced labor import ban.

In a recent conversation about forced labor trade enforcement, I was asked if I consider myself an idealist.

Harsh, right?! But okay. Fair’s fair.

I know I reel you in with the Jimmy Fallon gifs, but what other newsletter offers you rhapsodies on the “promise and potential” of the forced labor import ban? In a haze of holiday cookies and Christmas carols a few weeks back, I may or may not have compared the law to a newborn baby worth beholding and marveling over.

I’m not a long-term Washingtonian by any stretch, but I did arrive in town when Barack Obama was President which is like 6 administrations ago in dog years. During that time, the harshest (non-profane) derogatory label I’ve heard drip from the mouth of a swamp creature is “true believer”.

I’ve heard more cruel personal attacks, for sure. And God knows political rhetoric has gotten OUT OF HAND. But that phrase, uttered by a savvy man about a person who is advocating for something they care about, captures a blend of cynicism, derision, condescension and contempt that is just uniquely this town.

The question about whether I’m an idealist, though, was presented with courtesy and charity. Not an insult at all, actually! But it still had me:

After I mopped my coffee, though, it got me to thinking. Who are the real idealists around here anyway?

You see, I consider myself a truth-teller. I find it difficult to abide self-serving proclamations of the moral repugnance of forced labor that aren’t backed up by action. I’m willing to chirp at the emperors that they’re undressed.

I’m also a pragmatist and realist. If you want to countervail globalism’s contributions to forced labor, it’s going to take a lot more than a Great Idea and a Presumption (i.e., Section 307 and the UFLPA).

Taking action to end trade in slave-made goods was almost the only substantive legislation to unite the last Congress. And yet, as currently written and enforced, it is impossible for the U.S. forced labor trade laws to achieve their common objective of eliminating forced labor in U.S.-bound supply chains. To the contrary, the most consistent result from the present state forced labor trade enforcement are indecipherable and unequal decisions, collateral damage and chaos.

I write this week to share just a single example. Not a story of learnings from recent enforcement (you’ll have to get me over a coffee or a beer for those), but a hypothetical to illustrate a black hole at the very center of the forced labor import ban.

Even in the absolute best case scenario—that is, if we indulge an imagined scenario with so many rounded edges that it no longer bears a resemblance to reality—even there, the forced labor import ban is almost guaranteed to create a catastrophic impact on the most vulnerable.

Not allow—create.

Suppose that the enforcement process commences with an evidence-based process, and that CBP can actually find the “bad guys”.

Let’s also suppose that the “bad guys” are a large enough target for enforcement that they can’t just disappear (e.g., go out of business and pop up again tomorrow as a different company in a different name). In other words, imagine a fact pattern that solves the goldilocks dilemma of enforcement that is either so narrow as to be an irrelevant footnote to global trade, or so gargantuan as to be alternately devastating or unenforceable no matter how much money Congress throws at it.

Let’s further imagine that the “bad guys” is an enterprise that supplies both to the United States and its other markets, so that when its capacity to serve the U.S. market is eliminated overnight upon the issuance of a WRO or detention activity, there remains some remnant of outside demand that keeps the business afloat (but not so much that the WRO is itself irrelevant).

Let’s suppose further—suspending all disbelief at this point—that after losing, say, 40-50% of its customer base (in the U.S), the “bad guys” for some reason decide to spare their workers (workers that were already being subjected to forced labor, mind you) the brunt of the economic fallout from this transformed economic landscape.

You with me? CBP selects a perfect target for enforcement, on the basis of actual evidence of forced labor, takes an enforcement action that inflicts a devastating but not terminal amount of economic pain, and out of the goodness of their hearts, human rights abusers decide to shelter their victims from further adverse consequences.

EVEN HERE, in this law school hypothetical gone-on-a-bender, what comes next is an absolute black hole.

How would CBP begin to define the standard of what “good” looks like? What constitutes proof of the absence of forced labor? Does CBP want an audit? From whom? Evaluating what? Should there be a monitoring program? Should fines exacted to reimburse workers? Should penalties be imposed on wrongdoers for past conduct? Through what legal system? The law has simply nothing to offer.

If there is a universe in which vulnerable and abused workers come out ahead in this story, I can’t conceive of it.

To believe that Section 307 is, as currently written, capable of incentivizing the identification and eradication of supply chain links to forced labor, you don’t just need to be an idealist, or a true believer. You’d need to be a human rights cosplay enthusiast. I, for one, am not down.

I’m not down because I take the law seriously. When every elected representative in Congress (minus one) says we need laws to untangle the web of forced labor in global trade, I take them seriously. [Insert snarky .gif here.] When every company I’ve ever crossed paths with says they oppose forced labor, I take them seriously as well.

This law is capable of taking a modern form that solves the collective action dilemmas presented by forced labor in global supply chains. There are a lot of stakeholders within the ecosystem, with wildly different incentives to action—workers subject to forced labor, NGOs and human rights activists, multinational corporations, small and medium size enterprises, foreign producers, foreign governments, and customs officials. Everyone is opposed to forced labor, but the law can cure perverse incentives (which, as rational actors, we all face), by orienting opportunities, clarifying responsibilities and defining consequences.

Does that make me an idealist? I’m not sure. But it probably makes me a true believer.