6 Jun 2012
Books/ Book Chapters
Trade and Labour Standards
Max Planck Encyclopedia of Public International Law, Vol X
The tension between trade and labour rights essentially stems from the concept of comparative advantage. Since raising labour standards entails additional costs, low wage countries in particular fear they might lose their comparative advantage over industrialized countries if they implement higher labour standards. From workers’ and industrialized countries’ perspective there are concerns that the lack of international labour standards may result in a regulatory race to the bottom.
There is evidence that growing international trade and investment agreements may have negative impacts on labour standards. Examples include export processing zones which aim at attracting foreign investment by providing free trade conditions and a liberal regulatory environment to firms. Exploitative child labour and forced labour/slave labour conditions are just the most dramatic forms; many other violations of fundamental labour standards may occur.
Globalization, growing competition, and emerging new actors such as multinational enterprises or non-governmental organizations are about to change the pattern of traditional international law and the role of organizations involved in the trade and labour debate, such as the World Trade Organization (WTO), the Organization for Economic Co-operation and Development (OECD), the World Bank (World Bank Group), as well as trade unions.