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Labor Clauses in Regional Trade Agreements and Effects on Labor Conditions: An Empirical Analysis

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  • Isao Kamata

Abstract

his paper attempts to perform an empirical analysis of the effects of “labor clauses” provided in bilateral or plurilateral trade agreements (or regional trade agreements: RTAs) on working conditions that laborers in the RTA signatory countries actually face, using macro-level data for a wide variety of countries. The paper first reexamines the labor-provision classification of 223 RTAs in force proposed in the author’s other study (Kamata, 2014) by reviewing the texts of a selected set of those RTAs, and re-defines “RTAs with labor clauses” according to two criteria: (i) the agreement urges or expects the signatory countries to harmonize their domestic labor standards with internationally recognized standards, and (ii) the agreement stipulates the procedures for consultations and/or dispute settlement on labor-condition issues between the signatory countries. Based on this RTA labor-clause (re-)classification, this paper then estimates the impacts of a country’s trade intensities with partners of RTAs with labor clauses and of those without on four measured working conditions in the country: average earnings, average work hours, fatal occupational injury rate, and the number of the ILO’s fundamental conventions ratified. The empirical result indicates that RTAs with labor clauses do not differ from RTAs without labor clauses in the direction of their impacts (improving or worsening) on actual working conditions, and trade intensity with RTA partners should not have a statistically significant impact on the country’s working conditions regardless of whether or not those RTAs include labor clauses. It, however, may be premature to conclude that RTA labor clauses are not effective, since there should be some technical issues inherent in the method and data employed in the current study.

Suggested Citation

  • Isao Kamata, 2015. "Labor Clauses in Regional Trade Agreements and Effects on Labor Conditions: An Empirical Analysis," Discussion papers e-14-019, Graduate School of Economics Project Center, Kyoto University.
  • Handle: RePEc:kue:dpaper:e-14-019
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    References listed on IDEAS

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    1. Edmonds, Eric V. & Pavcnik, Nina, 2006. "International trade and child labor: Cross-country evidence," Journal of International Economics, Elsevier, vol. 68(1), pages 115-140, January.
    2. Limao, Nuno, 2005. "Trade policy, cross-border externalities and lobbies: do linked agreements enforce more cooperative outcomes?," Journal of International Economics, Elsevier, vol. 67(1), pages 175-199, September.
    3. Vivek H. Dehejia & Yiagadeesen Samy, 2007. "Trade and Labor Standards: A Review of the Theory and New Empirical Evidence," Carleton Economic Papers 07-12, Carleton University, Department of Economics.
    4. Huberman, Michael & Lewchuk, Wayne, 2003. "European economic integration and the labour compact, 1850–1913," European Review of Economic History, Cambridge University Press, vol. 7(1), pages 3-41, April.
    5. Lippoldt, Douglas, 2013. "Policy Priorities for International Trade and Jobs," 2013: Employment, Immigration and Trade, December 15-17, 2013, Clearwater Beach, Florida 182509, International Agricultural Trade Research Consortium.
    6. Vivek Dehejia & Yiagadeesen Samy, 2004. "Trade and labour standards: theory and new empirical evidence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(2), pages 179-198.
    7. Spagnolo, Giancarlo, 2001. "Issue Linkage, Credible Delegation, and Policy Cooperation," CEPR Discussion Papers 2778, C.E.P.R. Discussion Papers.
    8. Martin, Will & Maskus, Keith E, 2001. "Core Labor Standards and Competitiveness: Implications for Global Trade Policy," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 317-328, May.
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    More about this item

    Keywords

    wage gap; International trade; Regional trade agreements; Labor standards; Labor clauses;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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