Working Beyond the Border: European Union Trade Agreements and International Labour Standards

Recent high profile incidents such as the collapse of the Rana Plaza Building in Bangladesh demonstrate the need for workers' rights to be better protected and enhanced across the globe. Sustainable development clauses in international trade agreements provide one important mechanism by which major trading blocs, such as the European Union, are attempting to do this.

This project investigates this commitment of the EU to improve labour standards beyond its borders. It focuses on the EU pledge "to put more of its commercial weight behind efforts to promote social standards and decent work in bilateral and multilateral trade negotiations", which has been trumpeted in the labour standards provisions contained in "new generation" free trade agreements (FTAs) as a key policy mechanism for promoting labour standards in third countries. This project investigates the impact of these new FTAs on workers in third countries.

Since the 2011 free trade agreement with South Korea, all new EU FTAs contain a specific chapter on 'Trade and Sustainable Development', with commitments to respect core labour standards (freedom of association, eliminating forced labour and abolishing child labour). They also contain institutional mechanisms to monitor and review compliance with those standards including a joint committee of representatives of the two parties to the agreement, an independent body of experts to handle complaints, and a civil society review mechanism.

This model is novel and innovative. It is not a 'hard law' mechanism where sanctions are used to force compliance. Nor is it a 'soft' law mechanism (like Fair Trade) because states are making commitments to take action, and their performance is monitored and reviewed. Consequently, research into existing mechanisms for protecting labour standards is not helpful in understanding how effective the EU's new model is. There is also no existing research which directly investigates what the impact of this new model is on workers in countries that have signed a 'new generation' FTA with the EU; an absence noted by international agencies. This research project therefore fills this important gap.

We will examine three countries that have recently signed such agreements with the EU (South Korea, Moldova and Guyana), to investigate:
(1) the negotiating process for each agreement, and whether these processes have helped domestic coalitions in each country to push for better protection of labour standards;
(2) what is happening in the institutional mechanisms created by the trade agreements and the extent to which key labour standards issues are raised and dealt with;
(3) key export sectors in each country (automobiles, clothing and sugar respectively) to examine what the impact of the negotiating processes and institutional mechanisms in the trade agreements are in the factories and fields of third countries;

Vitally important to this project is the recognition that labour standards provisions in FTAs may have very different effects on workers' lives in third countries depending on a number of factors, including:
(1) How powerful each trading partner is and how this effects the EU's ability to influence its policies and practices;
(2) The geo-political context in which each agreement is implemented (a free standing trade agreement (South Korea), part of a wider economic partnership agreement (Guyana), or as part of much deeper economic integration (Moldova); and
(3) How different economic sectors are affected, hence our research will look at three different industries; capital-intensive manufacturing (automobiles); labour-intensive manufacturing (clothing) and agricultural production and processing (sugar).

Evaluation of this 'new generation' model will be a vital source of evidence to inform the work of international organisations such as the European Commission, the ILO, and trade union/NGO groups over FTA implementation and negotiations.

The majority of the general public, as well as many politicians and a wide range of civil society actors in the EU and in third countries are concerned that trade liberalisation is leading to a 'race to the bottom' and that globalization provides opportunities for economic growth but increases social inequalities and is profitable only for large companies, not for citizens. The European Commission has identified labour standards provisions in EU trade agreements as a key mechanism for ensuring that such agreements create economic growth in a way that promotes decent work for workers inside and outside the EU.

This research project will therefore provide vital evidence about the effectiveness of the 'new generation' model of labour standards protection and will help to inform policy making communities in this area and to enhance the capacity of international organisations such as the ILO in their efforts to monitor labour standards implementation.

Key beneficiary groups and the main benefits to each group are as follows:
(1) Officials from the European Commission who are involved in the negotiation of trade agreements with third countries. Benefits: (a) Findings about the efficacy of existing mechanisms to protect and promote labour standards, and (b) recommendations for how such mechanisms can be enhanced in the future which will inform ongoing trade negotiations.
(2) National policy-makers from the UK and other EU member states and other key EU actors (e.g. the European Parliament and European industry associations) with the power to influence future negotiating positions of the EU and to push for amendments to future labour provisions in trade agreements. Benefits: analysis of the strengths and weaknesses of the current 'new generation' model and recommendations for how the model can be enhanced for the future.
(3) Third country policy-makers who are negotiating trade agreements with the EU. Benefits: As (2) above.
(4) Policy-makers from other countries who are developing their own labour standards provisions in trade agreements with third countries and who are copying (elements of) the EU model (e.g. Switzerland). Benefits: As (2) above.
(5) Actors who are participating in the institutional mechanisms set up by the Sustainable Development Chapters of the EU's 'new generation' FTAs (business representatives, trade union actors, civil society actors and government officials). Benefits: Findings in relation to the functioning of the institutional mechanisms which will inform participants about how best to engage with those mechanisms in the future, and where to call for reforms.
(6) Civil society and trade union groups working on the promotion and protection of labour standards. Benefits: Empirical evidence of the effectiveness of the 'new generation' model and recommendations for enhancement will inform lobbying strategies of these organisations.
(7) International Organisations developing methodologies for studying the impact of bilateral and regional trade agreements on workers' lives. Benefits: The development of new methodologies for studying the 'promotional' model of labour standards protection which are found in an increasing number of trade agreements signed by the EU and a range of other countries across the globe.
(8) Public understanding of FTAs. Benefits: Vital evidence to inform public debate about whether labour standards provisions in EU trade agreements are working to ensure that trade liberalisation creates economic growth in a way that promotes decent work for workers inside and outside the EU.