Labor Standards and Human Rights: Implications for International Trade and Investment
AbstractThe establishment of international labor standards linked to market access within the WTO is among the proposals intended to remedy the gross violations of labor and human rights that accompany international trade and investment. Yet, the WTO Charter and, previously, the GATT are virtually silent on the potential inhumanity of globally integrated goods and services markets. Despite intense pressure from the United States and the European Union, the Singapore Ministerial Declaration (December 1996), while acknowledging the importance of international labor standards, identified the International Labor Organization (ILO) as the competent body to establish and monitor labor standards. However, advocates for international labor standards ultimately gained access to the process of rules-setting in the WTO indirectly through Article XXIV governing the creation of customs unions and free trade agreements and, more importantly, the 1971 GSP Decision permitting special and differential treatment of developing country exports. Thus, contrary to the WTO Ministerial dictates, labor standards are now routinely enforced by the prospective loss of preferential tariff concessions and market access. We discuss in this context a mechanism for linking ILO-established labor standards, monitoring by the ILO, and enforcement through the threat of lost trade concessions that emerged fully operational in the 1999 U.S.-Cambodia Bilateral Textile Trade Agreement. Under this agreement, the United States provided Cambodia access to US markets by giving expanded apparel and textile quotas conditional on improved working conditions in the garment sector. We also discuss the labor and human-rights issues that emerge in a globalizing world economy, the market failures that produce labor and human-rights violations, and the role of labor standards in mitigating the most grievous of consequences. We then discuss the evidence on the impact that labor standards have on trade, firm behavior and investment, and on workers, and whether or not there is a race to the bottom, which we conclude not to be the case.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 622.
Length: 44 pages
Date of creation:
Date of revision:
International Labor Standards; ILO; WTO; Effects on Trade and Investment;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William W. Olney, 2010.
"A Race to the Bottom? Employment Protection and Foreign Direct Investment,"
Center for Development Economics
2011-02, Department of Economics, Williams College, revised May 2011.
- Olney, William W., 2013. "A race to the bottom? Employment protection and foreign direct investment," Journal of International Economics, Elsevier, vol. 91(2), pages 191-203.
- William W. Olney, 2010. "A Race to the Bottom? Employment Protection and Foreign Direct Investment," Department of Economics Working Papers 2011-02, Department of Economics, Williams College, revised Jan 2012.
- Falk, Armin & Fehr, Ernst & Zehnder, Christian, 2005.
"The Behavioural Effects of Minimum Wages,"
CEPR Discussion Papers
5115, C.E.P.R. Discussion Papers.
- Falk, Armin & Fehr, Ernst & Zehnder, Christian, 2005. "The Behavioral Effects of Minimum Wages," IZA Discussion Papers 1625, Institute for the Study of Labor (IZA).
- Armin Falk & Ernst Fehr & Christian Zehnder, . "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
- Ann Harrison & Jason Scorse, 2010. "Multinationals and Anti-sweatshop Activism," American Economic Review, American Economic Association, vol. 100(1), pages 247-73, March.
- Eric Edmonds, 2007.
- Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2006.
"Incentives for Managers and Inequality Among Workers: Evidence from a Firm Level Experiment,"
IZA Discussion Papers
2062, Institute for the Study of Labor (IZA).
- Oriana Bandiera & Iwan Barankay & Imran Rasul, 2007. "Incentives for Managers and Inequality Among Workers: Evidence From a Firm-Level Experiment," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 729-773, 05.
- Orana Bandiera & Iwan Barankay & Imran Rasul, 2006. "Incentives for managers and inequality among workers: Evidence from a firm level experiment," Natural Field Experiments 00213, The Field Experiments Website.
- Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2006. "Incentives for Managers and Inequality Among Workers: Evidence from a Firm Level Experiment," CEPR Discussion Papers 5649, C.E.P.R. Discussion Papers.
- Emily Oster & M. Bryce Millett, 2010. "Do Call Centers Promote School Enrollment? Evidence from India," NBER Working Papers 15922, National Bureau of Economic Research, Inc.
- Kimberly Ann Elliott & Richard B. Freeman, 2003. "Can Labor Standards Improve under Globalization?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 338.
- Jean-Pierre Chauffour & Jean-Christophe Maur, 2011. "Preferential Trade Agreement Policies for Development : A Handbook," World Bank Publications, The World Bank, number 2329, October.
- Busse, Matthias, 2002. "Do Labor Standards Affect Comparative Advantage in Developing Countries?," World Development, Elsevier, vol. 30(11), pages 1921-1932, November.
- Matthias Busse & Christian Spielmann, 2006.
"Gender Inequality and Trade,"
Review of International Economics,
Wiley Blackwell, vol. 14(3), pages 362-379, 08.
- Busse, Matthias & Spielmann, Christian, 2004. "Gender Inequality and Trade," HWWA Discussion Papers 308, Hamburg Institute of International Economics (HWWA).
- Spielmann, Christian & Busse, Matthias, 2005. "Gender Inequality and Trade," Proceedings of the German Development Economics Conference, Kiel 2005 8, Verein für Socialpolitik, Research Committee Development Economics.
- Ann Harrison, 2006.
"Globalization and Poverty,"
NBER Working Papers
12347, National Bureau of Economic Research, Inc.
- Jean-Pierre Cling & Mireille Razafindrakoto & François Roubaud, 2007.
"Export Processing Zones in Madagascar: the impact of the dismantling of clothing quotas on employment and labour standards,"
DT/2007/06, DIAL (Développement, Institutions et Mondialisation).
- Roubaud, François & Razafindrakoto, Mireille & Cling, Jean-Pierre, 2009. "Export Processing Zones in Madagascar: the impact of the dismantling of clothing quotas on employment and labour standards," Economics Papers from University Paris Dauphine 123456789/4336, Paris Dauphine University.
- Kimberly Ann Elliott, 2004. "Labor Standards, Development, and CAFTA," Policy Briefs PB04-02, Peterson Institute for International Economics.
- Brown Drusilla K, 2006. "Consumer Product Labels, Child Labor and Educational Attainment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-29, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FSPP Webmaster).
If references are entirely missing, you can add them using this form.