As labor provisions in trade agreements have become increasingly ubiquitous, there remain questions about whether or not these provisions have been effective in improving working conditions in trading partner countries. Through an analysis of sample labor provisions in United States and European Union free trade agreements, this paper shows that both approaches, albeit using different methods, aim primarily to improve de jure labor law and de facto enforcement of that law by government regulatory institutions. This paper argues that instead, labor provisions ought to be grounded in a supply chain approach. A supply chain approach shifts the focus from impacting de jure and de facto labor law as administered by the state though sanctions or dialogue, and towards context specific, experimental, and coordinated private and public regulatory interventions that operate in key export industries that are implicated in trading partners' supply chains. It does so in part by recognizing the potential regulatory power of consumer citizenship.
Free trade and global economic integration has been under pressure from populist political movements across the globe. Many of the critiques of trade relate to the losses, both economic and non-economic, that trade’s losers suffer. Many economists and trade lawyers consider the case for free trade to be unassailable and rely on the compensation principle to argue that trade is welfare maximizing if trade’s losers could be compensated such that each is as least as well off as they were before. As a corollary, they will argue that the losers of trade should be compensated for their losses through, for example, direct payments, wage insurance, job retraining, or other supports. It is further assumed that such compensation will boost support for liberal trade policy. This article argues, however, that compensation is conceptually and practically limited in its ability to in fact make trade’s losers whole and is a poor tool to build support for free trade and address the plight of trade’s losers. Instead, it is suggested that broadly targeted non-trade specific programs are preferable, as well as perhaps a reconsideration of the purpose of safeguard measures such that they may be explicitly applied in order to mitigate political opposition to trade rather than only when industries are under threat.
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