Dispute settlement, labor and environmental provisions in PTAs: When will business interests shift positions?

Abstract

Some protrade business interests that are against hard enforcement of labor and environmental provisions in trade deals may end up eventually supporting it, while others stick to their initial opposition. Why? When will their positions change? The existing literature would expect protrade interests to be more or less in favor of non-trade issues in trade policies according to how dependent on the international economy they are. However, longitudinal variation in export- and import-dependence does not suffice to explain change of the sort I am interested in. I argue that the position of protrade business interests change as they accumulate experiences on the negotiation/ratification of trade deals. To probe that argument, I present two paired comparisons analyzing the position of protrade business interests as pertains to the use of sanctions to enforce labor and environmental provisions in preferential trade agreements (PTAs) signed by Canada and Australia, and by the United States (US) and European Union (EU) between 1993 and 2019. My analysis points to the overall plausibility of my hypothesis and to avenues for future research. The paper helps understand the political activity of business interests on trade and sustainable development and can shed new light on the politics behind the design of social and environmental provisions in PTAs.