Standards that regulate or fail to regulate foreign flows of investment, can have a powerful and lasting impact on issues regarding economic development and environmental protection, labor regulations, political and economic stability.
Workers in the North perceive FDI manufacturing as the exodus of low-skilled, labor-intensive jobs from their nations as it goes to rising markets in the South. They believe that the main reason multinational corporations (MNCs) relocate abroad is to take advantage of the purposefully subpar labor conditions and low pay of the South.
They suggest that action be taken (such as trade sanctions or other punitive measures) against any nations that would purposefully maintain low labor standards in order to draw foreign direct investment.
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