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How China's Employment Problems Became Trade Problems: China, Labour Law, and the Rule of Law

Author

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  • Susan Ariel Aaronson

    (Institute for International Economic Policy, George Washington University)

Abstract

In this article, I focus on the potential trade spillovers of Chinese policies to maintain employment. Chinese leaders are determined to maintain employment and have long ignored employment laws that could empower workers. But in 2007, China reformed its labor laws and allowed wide public comment. The new laws enhanced protections for workers, but the consensus among scholars, NGOs, and the US State Department is that these labor laws, like earlier laws, are unevenly and rarely enforced. I argue that Chinese failure to enforce these laws breachits WTO obligations. WTO members could use GATT Article XXIII, which establishes a "right of redress" for changes in domestic policy that systematically erode market access commitments even if no explicit GATT rule has been violated. Used creatively, this strategy could enable WTO member states to encourage China to do a better job of enforcing its labour laws.

Suggested Citation

  • Susan Ariel Aaronson, 2010. "How China's Employment Problems Became Trade Problems: China, Labour Law, and the Rule of Law," Working Papers 2010-11, The George Washington University, Institute for International Economic Policy.
    • Handle: RePEc:gwi:wpaper:2010-11
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    File URL: http://www.gwu.edu/~iiep/assets/docs/papers/Aaronson_IIEPWP2010-11.pdf
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    Cited by:

    1. Ceglowski Janet & Golub Stephen S., 2012. "Does China Still Have a Labor Cost Advantage?," Global Economy Journal, De Gruyter, vol. 12(3), pages 1-30, September.

    More about this item

    Keywords

    China; WTO; trade; labor; employment; market access;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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