Labor Standards as a Trade Issue

Robert C. Shelburne, United Nations Economic Commission for Europe

Abstract

The current attempts by the United States to introduce core labor standards into its bilateral and regional trade agreements and into the World Trade Organization (WTO) are discussed. Labor standards are already an important aspect of several international organizations and agreements. The role of labor standards in the ILO, EU, U.S. trade law, and the OECD are discussed. The rationale and arguments against labor standards are evaluated. Models attempting to determine the economic implications of imposing minimum labor standards on low-standard nations are reviewed; assumptions as to whether capital and technology inflows are affected by labor standards are critical to these results. Generally, it appears that Southern nations have more of an incentive to establish labor standards as part of a global agreement rather than implementing them unilaterally. The political economy of this issue both within the Southern and industrial nations is considered, as well as the global political economy of getting standards introduced into the WTO.