Labor clauses with institutionalized cooperation

Transcript:Labor clauses with institutionalized cooperation:
Labor clauses with institutionalized cooperation measures in FTAs: a “win-win” outcome in North-South relations Damian Raess Assistant Professor Prepared for presentation at the EFTA Consultative Committee, 211th Meeting Geneva, 22nd November 2018 Outline Impact of labor provisions in FTAs policy implications Review key features of EFTA’s TSD chapter in relation to labor issues EFTA - EU comparison 3) Policy recommendations 2 Key debates about trade-labor linkages Are labor provisions protectionism in disguise, designed to reduce trade pressures? Do labor provisions in FTAs make a difference in workers lives? 2 cross-cutting issues: What type of provisions (sanction model Versus cooperation approach) best promote social and economic development? What is the role of social partners in the implementation and monitoring? 3 Preexisting beliefs about trade-labor linkages Protectionism in disguise benefiting high-income countries (Bhagwati 1995) Ineffective in protecting workers (at home and) abroad (e.g., on EU FTA, see Harrison et al. 2018) Only FTAs with strongly enforceable human rights provisions (sanctions model) improve human rights on the ground (Hafner-Burton 2005) 4 Impact of labor provisions on trade flows Study by Carrère, Olarreaga and Raess (2018) Not a priori clear whether labor provisions in FTAs reduce or increase bilateral trade flows Deterioration in comparative advantage of low-income countries? Increase in demand for goods produced with higher labor standards in high-income countries? Key findings: Introduction of labor provisions has on average no impact (all FTAs) Low-income countries benefit from the inclusion of labor provisions in North-South FTAs (boosts exports of low-incoming countries), especially when they include strongly institutionalized cooperation measures 5 Impact of labor provisions on labor rights Study by Raess and Sari (2018b) Freedom of association (FA) and collective bargaining (CB) rights Labour Rights indicators (in law LR and in practice LR) (Kucera and Sari 2018) Key findings: Labor provisions with strongly institutionalized cooperation measures are effective at improving compliance with in law (but not in practice) labor rights Strongly enforceable labor provisions (sanctions model) are not effective 6 Summing-up & policy implications “Business case” for trade-labor linkages: low-income countries benefit economically from introduction of labor provisions in North-South FTAs, particularly when accompanied by institutionalized cooperation mechanisms Claim that labor provisions amount to “hidden protectionism” is a myth Low-income countries should not oppose trade-labour linkage 2) High-income countries should not oppose trade-labor linkages either, as more trade is associated with “fairer trade,” helping to create a “level playing field” for workers and businesses in