The Entwining of Trade Policy with Environmental and Labour Standards
AbstractWhile environmental and labour issues are not new to the GATT, nor to other trade policy fora, they are likely to have a more prominent role in trade policy discussions in the years ahead for the newly formed World Trade Organization (WTO). Many developing countries perceive the entwining of these social issues with trade policy as a threat to both their sovereignty and their economies, while significant groups in advanced economies consider it unfair, ecologically unsound, even immoral, to trade with countries adopting much lower standards than their own. This paper examines why these issues are becoming more prominent, whether the WTO is an appropriate forum to discuss them, and how they affect developing and other economies. It concludes that: (a) the direct effect on developing economies is likely to be small and for some may even be positive through improved terms of trade and/or compensatory transfer payments; but (b) there is an important indirect negative effect on them and other economies, namely the potential erosion of the rules-based multilateral trading system that would result from an over-use of trade measures to pursue environmental or labour market objectives.
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Date of creation: Mar 1995
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Find related papers by JEL classification:
- F1 - International Economics - - Trade
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
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