Exactly. Free trade only works well if both countries are playing by the same rules. Which I guess is why trade deals take years and hundreds of diplomat hours to arrange.
There is no motivation to stop it. China doesn't want to do it because they would have to hike prices to offset the cost, thus making them less competitive. US companies don't want to change anything because they don't want to start paying for proper disposal either.
Also, free trade is freedom from regulations / tariffs, etc. I always thought it was free to compete (i.e. anti-trusts / monopoly). Silly me.
So it could be said this is a direct result of free trade in it's classical economic term.