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The Trans-Pacific Partnership: A Positive or Negative for Workers?

December 21, 2015

Labor provisions are among the most controversial dimensions of modern trade agreements. That’s been true in every major US free trade agreement since NAFTA; and the latest agreement, the Trans-Pacific Partnership (TPP), includes expanded and more ambitious provisions, particularly in regard to forced labor and freedom of association in developing countries.

The Trans-Pacific Partnership Agreement is a free trade agreement negotiated by nine countries—the United States, Australia, Brunei, Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam—that will write the rules for global trade among those nations.

The impact of the TPP’s labor provisions, including potential impact on trade and government enforcement of labor laws, is the subject of the latest Takeaway policy paper produced by the Mosbacher Institute for Trade, Economics and Public Policy at the Bush School of Government and Public Service at Texas A&M University.

Labor standards address issues about the way workers are treated, such as rights to organize and strike, health and safety conditions, minimum wages, and working hours. In the policy paper, Dr. Raymond Robertson, a professor in the Department of International Affairs at the Bush School, explores the background and potential impact of including labor standards in trade agreements.

“Over time, labor provisions have expanded in their ambition and coverage,” says Robertson. “While earlier agreements were more likely to focus on a nation’s domestic labor laws, more recent agreements are more likely to reference both domestic and international standards and include provisions for remedies when these standards are not followed.”

Robertson also noted that while the labor provisions in free trade agreements have been expanded, an important question is whether they actually have an impact on improving the conditions of workers in developing countries.

“Recent research from Latin America finds that labor provisions in free trade agreements often result in increased government inspections—an important first step in the enforcement of domestic laws,” says Robertson. “So making commitments to increase the enforcement of domestic labor laws seems to result in increased government attention to those issues,” he added.

Opponents of expanding labor provisions in trade agreements are concerned that they may reduce trade due to the increased costs. Current research suggests, however, that labor provisions in trade agreements do not reduce the trade-promoting effects of trade agreements.

Robertson’s analysis also shows that while some labor provisions in the TPP extend those in previous agreements, most have been tried before with no apparent reduction in their trade-promoting effects. However, the new TPP provisions could benefit workers in developing countries as government enforcement of domestic labor laws increases. Overall, says Robertson, it is likely that the global benefits of the TPP labor provisions will be more positive than negative.

The full Takeaway can be found online at http://bush.tamu.edu/mosbacher/takeaway/.

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