Ethics frequently come up against politics. At the moment there is great debate over the Trump administration’s insistence on increasing tariffs to affect the exports of other nations into our country. While I can appreciate all sides of the argument, there is a larger ethical issue that seems to be getting ignored in the equation, Do tariffs matter in light of bribes?
Transparency International
Transparency International tracks nations to determine if they are complying with the OECD “Anti-Bribery Convention.” In their most recent 2018 report they determined:
“There are many losers and few winners when companies bribe foreign public officials to win lucrative overseas contracts. In prioritizing profits over principles, governments in most major exporting countries fail to prosecute companies flouting laws criminalizing foreign bribery.”
In fact, according to the agency, worldwide, only 11 of 44 jurisdictions conduct active or moderate enforcement. Some of the countries among the 11 that do try to monitor bribery in regard to their exports include Germany, Israel, Britain, the U.S., Australia, and Sweden. However, of all 11 country areas, they only accounted for about 30 percent of all the exports.
The report found that 33 countries, that account for 52 percent of world exports, had “limited or little enforcement,” and these countries surprisingly include Canada, New Zealand, China, India, Japan, and Ireland.
The OECD, the Organization for Economic Cooperation and Development, is a hybrid assembly that combines the governments of 34 democracies as well as 70 non-member economies in an effort to “promote economic growth, prosperity, and sustainable development.”
Neither India nor China is OECD signatories but they are presumably signatories to what is known as the “UN Convention on Corruption” which also calls for enforcement against bribery abroad.
It is obvious from the study that the majority of countries worldwide are not in adherence, and that bribery to gain favor for exports is a thriving practice. I believe even that to be in error.
For example, if a non-signatory country or a country with little or no enforcement such as China, bribes an official of a country such as Sweden to buy a raw ingredient, and if Sweden then sells a product containing that ingredient to Germany, how can all that be tracked?
Bribery
In so many of the scandals we have reported on, bribery takes on a surprisingly large role. The giving or the taking of bribes has a surprisingly large influence on international trade. If, for example, the U.S. increases tariffs on a certain class of goods that are being imported into our nation, but if the country doing the exporting is actively bribing officials, who are to track all of that activity?
If the report is accurate in its tracking, we can see fairly clearly that close to 70 percent of the world’s exports may be partially or completely influenced by bribery. Whether a small manufacturing company or a high-ranking elected official or someone involved in purchasing pharmaceuticals or raw materials, it is troubling that despite tariffs or fair-trade agreements, that bribery can circumvent a level field of trade.
It can lead us to a startling conclusion that once tariffs are rationally negotiated so that both countries are satisfied, the far bigger issue is if both countries are adhering to anti-bribery measures.
Recently Ireland has imposed severe penalties for bribery, and I have written on this issue, but what of an official or an executive in another country, the U.S. for example, who indicates that they are “open to working out a deal.” Who will be monitoring that activity?
When concerns over tariffs or even bribes take the forefront, and ethics take the rear seat, the results could be catastrophic. Should there be an “ethical test” rather than monitoring of bribes? Should all public officials and corporate executives agree to an “Ethical Convention,” rather than being tracked for bribes?
Do tariffs matter in light of bribes? It would seem that while bribes under the table are almost impossible to track, that ethical violations reported by whistleblowers are potentially much more effective.
