The critics of NAFTA, WTO and many subsequent trade agreements would say the global trading system by its design and not by coincidence favors capital over labor. It does so by allowing virtually no protections for labor. But the trade agreements are thick with very concrete investment and banking and economic management rules, many of which were designed by bankers, financiers, capital interests. Nobody says those are "protectionist" because the rules don't shut down trade, but they do shut down investment. If the country doesn't accept those rules, it doesn't get to play. Is that fair?

Well, I guess it's true. It's the same thing with intellectual property rights. And you can say, why distinguish between those and labor conditions? I guess I would say these more directly go to the question of trade and economic activity and the labor conditions, the environmental rules even more, go to something that's a little bit further removed. So to me there's always been that distinction. But it is true that they're both conditions and, if you don't accept them, then you don't get to play, as you put it.

Just to go back to the labor thing for a moment. I tend to think that what I said before is kind of what the system should look like. But I still think it's a very complicated question whether you put labor conditions in an agreement. I would not hold back from going ahead on a trade agreement because another country refused to accept labor standards. If we were going to have a bilateral agreement with India and they refused labor standards, I still very much want to do the agreement.

On the other hand, I also think that everybody's better off if you have a system where there's some reasonable sharing of the benefits of economic activity, leaving aside the question of how do you define "reasonable."

Here's the basic problem, I think. I'd like it all to be market-based. But [John Kenneth] Galbraith wrote the book fifty years ago with that famous quote--"countervailing powers"--where he basically said, as I recollect, that if you have a big company negotiate with its workers and the workers aren't organized, it isn't real negotiations. Didn't he say something like that?

If you believe in a market-based system, the system is a negotiation between two people who can really negotiate with each other. If one side has no negotiating power, that isn't really a market-based system. Its an imposition of one on the other.

But that's a breakthrough point for you to make.

What point?

The point being that the market-based system requires negotiating power and if one side doesn't have that power, which is generally though not always the case in the global system, then there's something wrong with the system.

Well, I think that's right. I am not a labor lawyer. Look, I don't want to push that. It's kind of a tentative thought. I want to be sure what I have said because it is tentative.

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