Labor Provisions in Trade Agreements: Recasting the Protectionist Debate

40 Pages Posted: 21 Sep 2020

See all articles by Desiree LeClercq

Desiree LeClercq

Cornell ILR School

Daniel Samaan

International Labour Organization (ILO)

Raymond Robertson

Texas A&M University

Date Written: July 10, 2020

Abstract

As labor provisions in regional trade agreements proliferate, critics contend that they are used for protectionist purposes. Existing categories of labor clauses lead to inconsistent empirical results. We propose and apply a new typology for labor clauses to all WTO-notified regional trade agreements from the 1990s through February 2016 and generate Pseudo Poisson Maximum Likelihood and Two-Stage Heckman gravity model estimates of the relationship between labor provisions and bilateral trade. Although individually heterogeneous, the overall relationship between labor provisions and pair-wise trade is positive. Contrary to contention, our estimates suggest that labor provisions reduce trade costs and facilitate trade.

Keywords: regional trade agreements; labor provisions; labor clauses; WTO; PPML; gravity model

JEL Classification: F13, F66, J8

Suggested Citation

LeClercq, Desiree and Samaan, Daniel and Robertson, Raymond, Labor Provisions in Trade Agreements: Recasting the Protectionist Debate (July 10, 2020). Available at SSRN: https://ssrn.com/abstract=3668916 or http://dx.doi.org/10.2139/ssrn.3668916

Desiree LeClercq (Contact Author)

Cornell ILR School ( email )

Ithaca, NY 14853-3901
United States

Daniel Samaan

International Labour Organization (ILO) ( email )

Route des Morillons 4
Geneva, 1211
Switzerland

Raymond Robertson

Texas A&M University ( email )

TAMU 4220
1004 George Bush Dr West
College Station, TX 77843
United States

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