Labor Clauses in Trade Agreements: worker protection or protectionism?

Carrère, Céline; Olarreaga, Marcelo; Räss, Damian (August 2017). Labor Clauses in Trade Agreements: worker protection or protectionism? (Discussion Paper Series DP12251). London: Centre for Economic Policy Research (CEPR)

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We explore the impact on bilateral trade flows of the inclusion of a labor clause (LC) in Trade Agreements (TAs). Using a gravity type framework, we find that the introduction of LCs has on average no impact on bilateral trade flows. However, there is some interesting heterogeneity. Exports of low-income countries benefit from the introduction of LCs in North-South trade agreements. Interestingly, the impact is stronger when accompanied by deep cooperation. On the other hand, stronger enforcement mechanisms, at best, marginally reinforce the impact of LCs. The results are clearly inconsistent with the idea that LC are set for protectionist reasons, casting doubt on the reluctance by low-income countries to include labor clauses in their trade agreements.

Item Type:

Working Paper

Division/Institute:

02 Faculty of Law > Department of Economic Law > World Trade Institute
10 Strategic Research Centers > World Trade Institute

UniBE Contributor:

Räss, Damian

Subjects:

300 Social sciences, sociology & anthropology > 340 Law
300 Social sciences, sociology & anthropology > 380 Commerce, communications & transportation

Series:

Discussion Paper Series

Publisher:

Centre for Economic Policy Research (CEPR)

Language:

English

Submitter:

Rebecca Anne Gilgen

Date Deposited:

02 Nov 2017 11:45

Last Modified:

02 Nov 2017 11:45

Related URLs:

JEL Classification:

F16

URI:

https://boris.unibe.ch/id/eprint/106432

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