Transnational flow of goods and services

In addition, labor laws are not being enforced within zones because governments regard EPZs as foreign trade policy, not a labor rights issue, and because they promised a cheap and compliant workforce to foreign investors, EPZ factories are run according to rules that break the labor laws.Second, concerning the race to the bottom, as the markets become more integrated and global, and restrictions on transnational flow of goods and services are quickly being eliminated, the result on wages, working conditions, employment and social security are devastating. According to Brecher and Costello (1998), the most direct result of globalization is “the ‘race to the bottom’ itself – the reduction in labor, social, and environmental conditions that results directly from global competition for jobs and investment” (p22). This race to the bottom is predominantly a vehicle for the MNCs, is sometimes promoted by governments, or is imposed by the World Bank or IMF. By moving production sites to countries with cheaper labour or by importing goods from these countries or by even threatening to do this, working conditions are under constant pressure from MNCs whose profits increase by billions while workforces diminish more every year.

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