Labour Standard Enforcement through Economic Treaties

r4d Working Paper by Christian Häberli

ABSTRACT: Recent economic treaties contain references to labour standards with increasing specificity and stringent enforcement mechanisms. However, despite evidence for continuing massive violations of workers’ rights, forced and child labour, these mechanisms are very seldom used. This article focuses on enforcement in respect of gross and continuing violations of so-called peremptory standards i.e. those generally recognised as norms from which no derogation is permitted (cogent law or ius cogens). It looks at a number of new trade and investment agreements, and conditional tariff preferences. Goods and services produced in violation of clearly peremptory standards not only raise the question of importer involvement. These violations may also cause trade distortions against which importers may take countermeasures, sometimes explicitly in cooperation with non-state stakeholders. Sanctions may consist, for instance, in suspensions of tariff concessions or outright import bans in response to labour standard violations creating trade and investment conditions. A possible barrier against sanctions are the non-discrimination rules enshrined in all economic treaties which seem to overprotect policy space and hence to also prevent, for instance, countermeasures against social dumping. This is particularly true for the rules framework of the World Trade Organization (WTO) which has no social clauses, but also for economic treaties with few stringent commitments, and a dearth of case law. Adjudicators in litigation cases would then have to decide whether ius cogens does take precedence over WTO and other economic treaty rules. Even though this has never occurred, this article argues that when trade measures are taken against violations of cogent law, they will withstand legal challenges better than would appear from looking at comparable WTO cases involving public morals. At the same time, producers respecting these international bottom lines for employment policies can defend their treaty-enshrined market access rights against unilateral standard setting and protectionism in disguise. It is too early to contend that economic treaty implementation has become more holistic by adding social and environmental dumping to the list of trade distortions subject to trade remedies. Nonetheless, this article concludes that some peremptory labour standards have become easier to enforce. International Economic Treaty Law still protects against non-trade distorting sanctions. But the new venues described here can limit the race to the bottom, and contribute to sustainable employment even in countries needing ‘more’ rather than ‘better’ jobs.