Could International Labor Rights Play a Role in U.S. Trade?
AbstractDuring its last complete business cycle, from 2001 to 2007, the United States experienced unsustainably high trade deficits. Policymakers are considering a number of measures to avoid a recurrence of such large external imbalances. One such measure is the promotion of better labor rights around the world. Proponents argue that higher labor standards would boost U.S. exports by increasing income growth abroad and reduce U.S. imports by shrinking international price differences. Opponents of such a policy move argue that it is disguised protectionism that will impede trade and harm living standards in the United States and abroad. In this paper, Weller combines U.S. trade data with data on international labor standards and other relevant economic variables to study if there is a link between labor rights abroad and U.S. trade. The results suggest that the United States would have benefited from more exports if there had been better worker rights around the world, while labor rights would not have had any measurable impact on U.S. imports. That is, the promotion of better worker rights around the world could contribute to fewer external imbalances without impeding international trade flows.
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Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp196.
Date of creation: 2009
Date of revision:
U.S. trade deficit; labor rights; relative price differences;
Other versions of this item:
- Christian E. Weller, 2011. "Could international labour rights play a role in US trade?," Cambridge Journal of Economics, Oxford University Press, vol. 35(1), pages 39-57.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
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