Carrère, Céline; Olarreaga, Marcelo; Raess, Damian (2021). Labor clauses in trade agreements: Hidden protectionism? The review of international organizations, 17(3), pp. 453-483. Springer 10.1007/s11558-021-09423-3
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We explore the impact of the introduction and design of labor clauses (LCs) in preferential trade agreements (PTAs) on bilateral trade flows over the period 1990–2014. While it is not a priori clear if the inclusion of LCs in PTAs will decrease or increase bilateral trade, we expect the direction of trade to matter, that is, we expect to observe the (negative or positive) impact of LCs in the South-North trade configuration. We also expect, in that configuration, stronger LCs to yield stronger (negative or positive) effects on bilateral trade flows. Using a novel dataset on the content of labor provisions in PTAs, we find in line with our first expectation that while the introduction of LCs has on average no impact on bilateral trade flows, it increases exports of low and middle-income countries with weaker labor standards in North–South trade agreements. Consistent with our second expectation, this positive impact is mostly driven by LCs with institutionalized cooperation provisions. In contrast, LCs with strong enforcement mechanisms do not have a statistically significant impact on exports of developing countries in North–South PTAs. The results are inconsistent with the ideas that LCs are set for protectionist reasons or have protectionist effects, casting doubt on the logic for the reluctance of many developing countries to include LCs in their trade agreements.
Item Type: |
Journal Article (Original Article) |
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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 > 320 Political science 300 Social sciences, sociology & anthropology > 340 Law 300 Social sciences, sociology & anthropology > 380 Commerce, communications & transportation |
ISSN: |
1559-7431 |
Publisher: |
Springer |
Language: |
English |
Submitter: |
Pablo Rahul Das |
Date Deposited: |
16 Jul 2021 10:06 |
Last Modified: |
05 Dec 2022 15:51 |
Publisher DOI: |
10.1007/s11558-021-09423-3 |
Related URLs: |
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BORIS DOI: |
10.48350/156611 |
URI: |
https://boris.unibe.ch/id/eprint/156611 |
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