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39). As this paper will discuss later, however, developing countries are also leery of both “green tariffs†(environmental tariffs) and “blue tariffs†(labor tariffs) since the negative effects arguably outweigh the gains.
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The most modest economists on the labor side of this debate argue for a system that monitors wages and working conditions and makes the results of this monitoring available to consumers (Krugman, p...
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270). Because exports of developing countries usually account for a small percentage of total GDP, the effect would be minimal. Still, these economists argue that implementing such a system would result in minor benefits with no real damage. The basis for their argument is that of market failure. Although trade restrictions usually result in deadweight loss, if production of a good yields extra social benefits, trade restrictions can actually increase welfare...
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