Brown Bag Seminar: "Pursuing Environmental and Social Objectives through Trade Agreements"

Abstract

Using a large dataset covering more than 180 countries over several decades, this paper employs a synthetic difference in difference estimator to provide empirical evidence on to the extent to which trade agreements incorporating non-trade provisions (labor standards, environmental protection and civil and political rights) are associated with improvements in corresponding non-trade performance indicators.

We distinguish between binding (enforceable) and nonbinding provisions in trade agreements, and control for the allocation of official development assistance targeting these three non-trade policy areas.

We find that inclusion of environmental provisions leads to changes in certain environmental indicators, with substantial variation in the sign of estimated relationships associated with binding and non-binding provisions and no relationship between trade agreement provisions and labor, civil or political rights.

We also find indicative evidence that binding non-trade provisions are associated with a reduction in official development assistance, whereas non-binding provisions are accompanied with increased aid for the respective nontrade issue area. Overall, the results suggest that efforts made to date to include non-trade provisions in trade agreements have not resulted in better nontrade outcomes.

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