There is no evidence that trading partners have weaponized labor provisions in trade agreements, according to new research co-authored by Desirée LeClercq, the Proskauer Employment and Labor Law Assistant Professor at Cornell University’s ILR School.
In research, published in The Journal of Law, Economics, and OrganizationLeClercq and co-authors Raymond Robertson (Texas A&M) and Daniel Samaan (International Labor Organization), examine the relationship between labor provisions and bilateral trade agreements from the 1990s to February 2016. LeClercq, a former attorney at the International Labor Organization, and his research colleagues found no evidence that labor provisions had any effect — much less reduced trade flows.
In a recent interview, LeClercq discussed why the findings shared in the paper are so important.
Why do you want to research this topic?
Often, when governments close their markets to cheaper exports abroad just to protect their domestic industries, they run the risk of violating trade rules under the World Trade Organization (WTO) because to engage in “protectionism.” For decades, since the Clinton administration unsuccessfully urged governments to formally link their trade and labor instruments to the World Trade Organization in the 1990s, there has been much speculation as to why the governments to incorporate binding commitments to international labor standards into their business. agreements.
Those commitments, as I wrote, are vague. No one knows what basic international labor principles mean in an operational sense. Consequently, governments that have entered into binding commitments—including the United States—exercise significant discretion to close their markets if they believe their trading partners are violating the principles. Many governments and observers have dismissed efforts to protect the rights of trade workers as “disguised protectionism,” accusing governments of using vague commitments as a pretext to close their markets without reason to retaliate by violating WTO rules.
Of course, we cannot verify the intentions of government negotiators. My work also shows how governments like the United States negotiate their trade agreements behind closed doors. Even if they negotiate transparently, if they go so far as to enter binding labor clauses to hide their protectionist motives, they won’t let the world know about it.
Instead of focusing on the goal, this project focuses on the effects. In 2015, when I was a lawyer at the International Labor Organization, I was involved in a trade and labor project with a rising star economist in the ILO’s research department—Daniel Samaan—and a well-known economist, Raymond Robertson. On a flight from Geneva to Washington, DC, we cooked up an idea about checking whether binding, clause-based labor sanctions actually cause market shutdowns as commonly suspected. It took us seven years to feel happy with our approach and typology, but I think it was worth the wait. Given the recent rhetoric surrounding the Biden administration’s “worker-centric” trade policy, this article could not have come at a better time.
What were your key findings?
On Twitter the other day, an economist posed the following question: Have any of you ever read an economics paper where none of the results turned out to be important? You see, often in economic work, the kiss of death has no effect. You want more findings that show unprecedented associations and lead to spin-off work that goes deeper. For example, if the preceding suspicions of disguised protectionism are true, binding, punitive-based labor clauses may cause a decline in trade. In our case, however, we found no negative association.
Our null results were the most significant finding we could have hoped for. Basically, we “take control” for a number of reasons and run a bunch of scary-sounding “changes”—a term that describes to me some intergalactic, Star Wars-esque technology—to see. what. We found that regardless of countries, level of development, other trade chapters etc., there is no association between binding, clauses based on labor sanctions and flows in trade. In other words, maybe governments aren’t sincere protectionists, and maybe they aren’t, but they certainly aren’t taking advantage of their opportunity to act like protectionists. They did not use their discretion to enforce commitments to vague labor standards to put the smackdown on their trading partners.
What are the practical implications and/or potential impacts of this research?
Many of the reluctance of countries to enter into trade agreements with labor provisions is that they become vulnerable to disguised protectionism. We hope that our work will contribute to their deliberations by showing, at least until 2016, that they will benefit from trade with labor protections. There is no evidence that trading partners have weaponized the provisions, and their workers benefit from the protections and technical assistance of trade agreements.
Desirée LeClercq et al, Labor provisions in trade agreements: recasting the protectionist debate, The Journal of Law, Economics, and Organization (2023). DOI: 10.1093/jleo/ewad009
Provided by Cornell University
Citation: New research dispels ‘protectionism’ myth (2023, July 10) retrieved 11 July 2023 from https://phys.org/news/2023-07-dispels-protectionism-myth.html
This document is subject to copyright. Except for any fair dealing for the purpose of private study or research, no part may be reproduced without written permission. Content is provided for informational purposes only.