UN Report Finds that Increasing the Number of Labor Provisions in Trade Agreements Does Not Hinder Trade (July 18, 2016) [1]
On July 18, 2016, the International Labour Organization (ILO) released a report [3] concluding that incorporating labor provisions in trade agreements does not harm or divert trade. In fact, the report found that “a trade agreement with labour provisions increases the value of trade by 28 percent on average, while a trade agreement without labour provisions increases trade by 26 percent.” The study defines “trade-related labor provisions” expansively as “any standard which addresses labour relations or minimum working terms or conditions, mechanisms for monitoring or promoting compliance, and/or a framework for cooperation.” The report notes that while trade has had positive effects—for instance, by improving access to markets and lowering the price of imported goods—mixed findings among academics suggest that trade has certain detrimental impacts on labor markets, particularly on job quality and income distribution. These suggestions receive empirical support from the ILO’s World Employment and Social Outlook 2015 Report [4]. However, the current report rebukes these suggestions, finding instead that “on average, trade agreements that contain labour provisions impact positively on labour force participation rates, bringing larger proportions of male and female working-age populations into the labour force and, particularly, increasing the female labour force.” According to the study, as of December 2015, seventy-six trade agreements that incorporate labor provisions were in effect, covering 135 economies. Additionally, eighty percent of agreements coming into force since 2013 contain labor provisions.