The way to prevent “labor/environmental arbitrage” is to repeal the labor union sweetheart laws (Wagner, Taft-Hartley, Norris-La-Guardia, Davis-Bacon) and relegate environmental concerns to the realm of individual property rights.
Will that make American shoemakers competitive with Vietnamese shoemakers who work for $2 per day?
... relegate environmental concerns to the realm of individual property rights.
Consider a steel mill that looks like this:
If the neighbors of that still mill in this country demand it not pollute like that, how is it supposed to compete with a mill that has no such constraints?