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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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    Cited by:

    1. Céline Carrère & Marcelo Olarreaga & Damian Raess, 2022. "Labor clauses in trade agreements: Hidden protectionism?," The Review of International Organizations, Springer, vol. 17(3), pages 453-483, July.
    2. Emilie M. Hafner-Burton & Layna Mosley & Robert Galantucci, 2019. "Protecting Workers Abroad and Industries at Home: Rights-based Conditionality in Trade Preference Programs," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(5), pages 1253-1282, May.
    3. Robertson,Raymond, 2021. "Deep Integration in Trade Agreements : Labor Clauses, Tariffs, and Trade Flows," Policy Research Working Paper Series 9599, The World Bank.
    4. Inmaculada Martinez-Zarzoso & Hendrik W. Kruse, 2019. "Are Labour Provisions in Free Trade Agreements Improving Labour Conditions?," Open Economies Review, Springer, vol. 30(5), pages 975-1003, November.
    5. Kamata, Isao, 2018. "Can RTA labor provisions prevent the deterioration of domestic labor standards? : the cases of statutory minimum wages and employment protection regulations," IDE Discussion Papers 716, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    6. Céline CARRERE & Marcelo OLARREAGA & Damian RAESS, 2017. "Labor Clauses in Trade Agreements: worker protection or protectionism?," Working Papers P200, FERDI.
    7. Aaditya Mattoo & Nadia Rocha & Michele Ruta, 2020. "Handbook of Deep Trade Agreements," World Bank Publications - Books, The World Bank Group, number 34055.
    8. Jacopo Timini & Nicola Cortinovis & Fernando López Vicente, 2020. "The heterogeneous effects of trade agreements with labor provisions (Updated March 2021)," Working Papers 2017, Banco de España, revised Mar 2021.
    9. Damian Raess & Andreas Dür & Dora Sari, 2018. "Protecting labor rights in preferential trade agreements: The role of trade unions, left governments, and skilled labor," The Review of International Organizations, Springer, vol. 13(2), pages 143-162, June.
    10. Jonas AISSI & Rafael PEELS & Daniel SAMAAN, 2018. "Evaluating the effectiveness of labour provisions in trade agreements: An analytical and methodological framework," International Labour Review, International Labour Organization, vol. 157(4), pages 671-698, December.

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    More about this item

    Keywords

    wage gap; International trade; Regional trade agreements; Labor standards; Labor clauses;
    All these keywords.

    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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