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The Generalized System of Preferences and NGO Activism

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Can preferential market access help to enforce Labor Laws in beneficiary countries? The Generalized System of Preferences (GSP) is accorded conditional on compliance with labor rights. The United States scheme leaves room for petitioning and revising the scheme upon request by interest groups. We here focus on such a review episode, and ask whether it led to the better enforcement of domestic Labor Laws in Indonesia. Using data from Indonesian Manufacturing firms, we show that GSP renegotiation combined with the activism of workers' rights groups helped increase firm-level average wages up to the minimum wage level, not only inside but also outside the export sector. GSP leverage allowed labor NGOs to act more effectively by putting the violation of national Labor Laws and poor working conditions under the international spotlight

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  • Lionel Fontagné & Michela Limardi, 2021. "The Generalized System of Preferences and NGO Activism," Documents de travail du Centre d'Economie de la Sorbonne 21014, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:21014
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    1. Koenig, Pamina & Krautheim, Sebastian & Löhnert, Claudius & Verdier, Thierry, 2021. "Local global watchdogs: Trade, sourcing and the internationalization of social activism," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-86-21, University of Passau, Faculty of Business and Economics.

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    More about this item

    Keywords

    GSP; labor standards; NGOs; wage determination;
    All these keywords.

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General

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