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Globalization

Abiding By US Environmental Laws When Operating Outside the US

An overwhelming majority supports the idea of US companies abiding by US rules on environmental protection when operating outside the United States. This is true even though majorities believe that doing so will raise prices for consumers and make it harder for US companies to compete.

An indication of how America's values are becoming globalized is the strong support for the idea that when US companies are operating overseas, they should be expected to abide by US environmental standards (similar to Americans' preference for US firms to adhere to US labor laws overseas; see "Abiding By US Labor Laws When Operating Outside the US").

In two recent PIPA polls, overwhelming majorities have maintained this view. When respondents were asked in January 2004 whether "American companies that operate in other countries should be expected to abide by US environmental standards," 87% percent said that they should be (50% felt this way strongly). Just 11% said they should not be expected to do so. Similarly, in an October 1999 survey, 88% said US companies should abide by US standards when operating abroad. Again, 11% believed they should not be expected to.

PIPA's October 1999 study revealed that this attitude held up even in the face of pro and con arguments about the idea. Respondents were first told:

As you may know, some countries have lower environmental standards than the US. Currently there is some discussion about whether American companies that operate in other countries should be expected to abide by US environmental standards.

They were then presented a series of arguments on this issue. The pro argument that received overwhelming support, with 81% finding it convincing, was based on purely moral grounds: "If Americans decide that to do something to the environment is wrong inside the US, then it would be wrong for Americans to do it in other countries." Seventy-one percent also found convincing the argument that "If US companies can lower their costs by moving to other countries with lower environmental standards, this will result in greater harm to the environment." Interestingly, the most self-interested argument received the lowest level of support, at 64%: "If US companies can lower their costs by moving to other countries with lower environmental standards, then they will take American jobs with them."

The con arguments were found less convincing, though some did resonate with a majority. An argument that denied US responsibility was firmly rejected. Only 33% found convincing the argument that "If other countries choose to have lower health and safety environmental standards, it is not the responsibility of American companies to meet the higher US standard." However, other con arguments were found convincing. Sixty-two percent were convinced that "Imposing higher standards on American companies will increase production costs, which will sometimes mean higher prices for the American consumer." Similarly, 54% were persuaded that "If US companies have to abide by higher standards than other companies, this will make it harder for US companies to compete."

Nonetheless, though they seemed to recognize that it would likely raise consumer prices and make it harder for American companies, an overwhelming majority (as noted above) still felt US companies should abide by US standards when operating overseas. [1]

In PIPA focus groups in late 1999, several people spoke passionately in favor of applying such standards:

Well, those laws and regulations were put into effect in this country to preserve our environment and to protect the human beings and the wildlife and the animals that are here. The main reason that some of these companies are going to other countries and setting up shop is to avoid having to abide by those. But how can we be setting an example for the rest of the world, and hoping that they are going to clean up their environments so everybody can live, if we let these companies go and do that?

Critics might point out that support for US multinational companies adhering to US environmental laws in other countries may just reflect a desire to protect American jobs. Although, as noted above, nearly two-thirds agree that lax companies moving to countries with low standards costs US jobs, that reasoning was the least convincing of the three arguments in favor of US firms abroad abiding by domestic US rules. Also, many polls have shown Americans placing high priority on environmental protection, even if it results in job losses (see the International Trade report, Trade and the Environment).

Notwithstanding their desire to see US firms operate by US standards overseas, at least one poll finding suggests the possibility that the public may also believe this stance is unrealistic (see Globalization: Abiding by US Labor Laws When Operating Outside the US).

 

 

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