Regional Trade Agreements and domestic labour market regulation

This chapter discusses the relationship between labour market regulation and regional trade agreements from both a legal and an economic angle. We examine empirically whether regional trade liberalisation is associated with deterioration (“race to the bottom”) of domestic labour standards beyond those reflected in the 1998 ILO Declaration on the Fundamental Principles and Rights at Work. Using a panel of 90 developed and developing countries, covering the years from 1980 to 2005, we find that after the entry into force of a regional trade agreement (RTA), labour standards applying to employment protection and unemployment benefits are significantly weakened. We show that such a lowering of protection levels tends to occur in high income countries and that this effect mainly stems from RTAs among such countries rather than with low or middle income countries. Concern about competitive pressure to weaken domestic labour regulation is reflected in a variety of undertakings in RTAs not to administer labour laws with a view to improving one’s competitive position in trade or foreign direct investment (FDI). The above-mentioned empirical findings indicate that such provisions could potentially become relevant, and that this is more likely to be the case for high income members of RTAs. Our analysis, from a legal point of view, of relevant institutional and procedural mechanisms indicates however that enforceability of the relevant provisions is weak for most of the existing legal texts.

Trade Policy, Investment and Migration: The Liberalisation Paradigm

Presentation by Thomas Cottier & Charlotte Sieber-Gasser prepared for the Markets for Migration and Development (M4MD) Conference, Bern, 13-15 September 2011. This presentation is part of Session 1 "Why Trade, Development and Migration?" of the M4MD conference, which was one of the thematic meetings held in the context of the 2011 Global Forum on Migration and Development (GFMD) chaired by Switzerland. Session 1 seeked to understand to what extent international trade and foreign direct investment drives migration and why states find it more difficult to liberalise the trans‐boundary movement of persons than to liberalise cross‐border trade in goods and services. One discussed aspect was why globalisation, trade liberalisation and FDI can lead not only to more, but also to less migration and what the corresponding effects on development would be. This Session provided a timely opportunity to broaden the perspective on international migration and explore the interaction between migration, development and trade policymaking.

Addressing climate change under preferential trade agreements: Towards alignment of carbon standards under the Transatlantic Trade and Investment Partnership

With its wide coverage of economic spheres and the variety of trade and investment measures currently under negotiation, the Transatlantic Trade and Investment Partnership opens windows of opportunity for advancing action on climate change. We examine possible avenues and international trade law implications for an alignment of carbon-related standards between the EU and the US. We compare EU and US carbon emissions standards for cars and argue that negotiators should strive for a mutual recognition of their equivalence for a transitional period, while pursuing the goal of full harmonization at the level of the highest standards of two parties at some date in the future. This could be a way to balance between economic and environmental interests and harness economic incentives for the benefit of climate.

The future of the WTO and the international trading system: investigating the institutional crisis

Pierre Sauvé addressed the issue of the WTO’s institutional crisis at a workshop on "The Future of the WTO and the International Trading System" organized by the European Parliament’s International Trade Committee in Brussels on May 8th, 2012.