Conflict, Mobilization and the Changing Design of Labor Clauses in Trade Deals

• In Event: The Design of Free Trade Agreements

Abstract

The promotion of labor standards is a consolidated trend in contemporary preferential trade agreements (PTAs), one which bears impacts both in terms of labor and trade governance. For one, the presence of labor standards in trade agreements may lead to a change in the labor laws of the trade partners. For another, given the general paralysis of WTO in achieving further trade liberalization, the negotiation of workers’ protection clauses is likely to assume an even greater role in making bilateral trade governance viable. Even though we understand that there is an overall expansion in the scope of those labor provisions, what explains the different degrees of variation we find between individual trade agreements over time? What explains the dimensions of change in labor provisions introduced by the EU-South Korea PTA vis-à-vis previous EU agreements (obligation and scope) when compared with the main changes the US-Peru PTA introduced vis-à-vis previous US agreements (obligation and dispute settlement)?

The overall goal of this research is to understand why and to what extent labor clauses change over time, but it does so using a case-centered and, more importantly, a process-centered approach. I resort to a domestic politics explanation to achieve that goal. While existing domestic politics explanations to trade-labor linkage point to societal interests and institutions, they fail to identify the sources of variation when domestic institutions and preferences remain stable. That, in turn, applies for most trade agreements negotiated recently, given that domestic interests and institutions only change in the medium to long range. In order to explain such variation, one would expect the existing literature to account for the changing politicization of labor clauses to domestic actors over a relatively short period of time. In view of that, my argument is that the greater the degree of conflict among domestic coalitions, the greater the mobilization of labor groups in response to market expansion initiatives and the greater the degree of variation in the labor clauses of trade agreements. In turn, I indicate how the politicization of labor provisions in trade agreements can improve a party's ability to push for concessions from foreign countries. By advancing that argument, the research challenges explanations that attribute change in labor conditionality to the agent's policy entrepreneurship, rather focusing on the balance of mobilization among principals.

Bearing the above in mind, the specific aim of this research is to understand the sources and process leading to a changing degree of politicization of labor clauses between individual trade agreements. In addition, it is interested in the feedback effects of such politicization in terms of bargaining leverage. This paper offers a preliminary probe of the arguments advanced by applying them to three cases (1) US-Chile and US-Peru agreements, (2) EU-Chile and EU-Peru agreements and (3) Canada-Chile and Canada-Peru agreements. They allow for variation in the independent variables and control for variables that could play a role otherwise. In terms of its contribution to the field, this research offers an original explanation to the process and degree of change in labor clauses in PTAs over time. Regarding the overall field of International Political Economy, this research builds upon and expands on the lobbying and principal-agent literature, opening new theoretical possibilities. Methodologically, is also expands the possible uses of process-tracing in the area of International Political Economy.

Author

• Rodrigo Fagundes Cezar