The Entwining of Trade Policy with Environmental and Labour Standards

Date

Authors

Anderson, Kym

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Journal ISSN

Volume Title

Publisher

Canberra, ACT: Centre for Economic Policy Research (CEPR), The Australian National University

Abstract

While environmental and labour issues are not new to the GATT, nor to other trade policy fora, they are likely to have a more prominent role in trade policy discussions in the years ahead for the newly formed World Trade Organization (WTO). Many developing countries perceive the entwining of these social issues with trade policy as a threat to both their sovereignty and their economies, while significant groups in advanced economies consider it unfair, ecologically unsound, even immoral, to trade with countries adopting much lower standards than their own. This paper examines why these issues are becoming more prominent, whether the WTO is an appropriate forum to discuss them, and how they affect developing and other economies. It concludes that: (a) the direct effect on developing economies is likely to be small and for some may even be positive through improved terms of trade and/or compensatory transfer payments; but (b) there is an important indirect negative effect on them and other economies, namely the potential erosion of the rules-based multilateral trading system that would result from an over-use of trade measures to pursue environmental or labour market objectives.

Description

Keywords

environmental standards, GATT, labour standards, trade policy

Citation

Source

C.E.P.R. Discussion Papers No 1158

Type

Working/Technical Paper

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Entity type

Access Statement

Open Access

License Rights

DOI

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