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Comparative Analysis of Labour and Environment Provisions in Regional Trade Agreements

Clinic: Graduate Institute, Fall 2021

Beneficiary: International Labour Organisation (ILO)

Executive Summary

Read the full report here

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This project creates a comparative framework and policy recommendations to strengthen labour and environmental provisions within Regional Trade Agreements (RTAs).

There is a particular sense of urgency in the coordination of labour and environmental provisions. Forward thinking regional trade agreements must adapt to the overlapping exigency of environmental disasters and labour exploitation to compete in global trade. For example, climate change is already severely limiting the availability of natural resources, job conditions, and transportation of goods. Similarly ,increasing global economic competition is putting pressure on the labour force. Therefore, it is of great importance for trade negotiators to address threats of trade distortion and avoid a race to the bottom in both labour and environmental arenas.

After demonstrating how labour and the environment are intricately interlinked, this report lays out key labour and environmental goals and standards. This report analyses six RTAs generally falling into a US-based approach (BTA, PTPA, USMCA, and CPTPP) and EU-based approach (EU-Vietnam, CETA, and KOREU). The report then compares RTA provisions focusing on the RTA elements of “obligations”, “monitoring and cooperation”, and “enforcement” provisions by examining US and EU approaches to trade agreements. Literature reviews and expert analysis on implementation were then used as guidance on how to strengthen the goals of labour and environmental protection, while advancing the goals of global and regional trade. The report concludes by proposing policy recommendations that could be adopted by Parties entering into RTA negotiations, in order to make use of the mutually compatible and reinforcing nature of labour and environmental standards.

Analysis and policy recommendations provide conclusions to this report's three guiding questions: (1) should labour and environmental provisions be combined in RTAs? (2) can labour and environmental protection learn from each other (3) how can coordination between labour and environmental provisions, or US and EU approaches, be enhanced in future RTAs?

First, we synthesize that, in general, future labour and environmental provisions should be linked, but not necessarily combined. Along the same lines, the US and EU approaches to RTAs should be linked and offer mechanisms for collaboration. However, unnecessary conflict could arise from selecting a superior option, such as choosing the US’ arbitration panel or the EU’s advisory panel for dispute settlement. As such, this report focuses on areas for potential collaboration, instead of the perceived need for choosing one path forward. Secondly, labour and environmental provisions can refer to and encompass similar elements; in effect, labour provisions can and should inform environmental provisions and vice-versa. Additionally, the US approach can learn from the EU and vice-versa. Third, future RTA trade negotiators should ensure there is coordination between labour and environmental provisions. The way forward to enhance such coordination is illustrated by elements of the current US and EU approaches.

This report concludes that removing the silos that typically separate labour and the environment in RTAs leaves significant room for mutually beneficial coordination and learning potential for all involved Parties.

Read the full report here.