RESEARCH AND ANALYSIS

The Wedding of Trade and Human Rights: Marriage of Convenience or Permanent Match?

Susan Ariel Aaronson and Jean Pierre Chauffour (1)

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The marriage of trade and human rights sounds contemporary, but it is in fact ancient. As long as men and women have traded, they wrestled with issues involving human rights (although these rights were not defined in international law until 1948 in the Universal Declaration of Human Rights).  For example, the ancients knew the sea could bring strangers with new goods and ideas, but these same strangers might loot their land or enslave their family.  Policymakers soon recognized they would need not only rules to govern trade, but rules to ensure that trade advanced human freedoms and opportunities.  

Policymakers gradually developed new rules to achieve both trade and human rights objectives. For example, in the early nineteenth century, England signed treaties with the U.S., Portugal, Denmark, and Sweden to ban trade in slaves. In the late nineteen century, the US, England, Australia and Canada banned trade in goods made by conflict labor.  These efforts stimulated international cooperation.  In 1919 the signatories of the Treaty of Versailles created the International Labor Organization (ILO); its members agreed that state failure to protect labor rights could distort trade and undermine labor rights in other countries. (2) 

In the 1980’s and 1990’s, the EU, the US, and other developed countries began to incorporate loose and non-binding human rights language in their preferential trade agreements (PTAs). However, Canada, Mexico, and the U.S. were the first countries to include explicit human rights provisions in a trade agreement. NAFTA (1993) includes labor rights in a side agreement, as well as transparency (access to information) and public participation obligations in both the body and side agreements.   

Today, many of the world’s most important trading nations, from Canada and the EU to Brazil and Chile include human rights language in their PTAs.  As a result, Aaronson estimates that over 75% of the world’s governments now participate in PTAs with human rights provisions. (3)   These nations have adopted various strategies for embedding human rights provisions including non-derogation clauses; language in the preamble; or language extending Article XX of the GATT/WTO.    Some of these provisions are binding; others are rhetorical.

Whatever their form or legal obligation, some analysts see these human rights provisions as “legal inflation.” They argue that governments are using trade agreements to impose their values and norms with a view to globalizing their social policies or regulatory approach.  Others consider that introducing human rights provisions in PTAs is simply a new form of protectionism in disguise. They stress that trade agreements are not the right place to address human rights issues. (4) 

In a new analysis of the actual practice of human rights in PTAs, (5) Susan Ariel Aaronson argues that the proliferation of these provisions signals the new reality of international trade.  Many of today’s PTAs are governance agreements.  She notes: 

  • The growing number and scope of PTAs with human rights provisions reflects a new “normal”—policymakers understand economic integration will not be successful without a stronger focus on improving governance among trade partners. (6) 
  • The US, Canada, the EU and the members of EFTA are the main demandeurs of human rights language in PTAs.  The EU and EFTA focus on human rights under the Universal Declaration of Human Rights; but they rely on aspirational language and dialogue.  Canada and the US focus on specific human rights; put these provisions in the body of the trade agreement and often make them binding.  The US and Canadian approaches have become more similar over time, but remain distinct as of 2010. 
  • Although a growing number of countries include and/or accept such provisions, this trend has limits.  Many policymakers in middle income and developing countries are reluctant to use trade instruments to change the behavior of other countries.  But as they get richer and more influential, these policymakers may become more willing to accept or to demand such provisions.  
  • The human rights promoted in these agreements include privacy rights, political participation, due process, access to information provisions, cultural rights, indigenous rights, and access to affordable medicines, among others.
  • While these agreements may prod some countries to change their laws or devote greater resources to human rights enforcement, little is known about their actual effect on human rights conditions.    
  • Human rights provisions are probably expensive for developing countries to implement (just like intellectual property rights).  They may have to devote scarce resources to fulfill some human rights before they have the national income or will to do so.       
  • If human rights provisions are designed carefully, they can focus on improving governance (the supply side) as well as empowering people to demand their rights. 
  • However, to be workable and enduring, policymakers need greater understanding of the trade and governance effects of human rights provisions in PTAs.
  • Policymakers, scholars and activists should use new tools such as human rights impact assessments as well as widely accepted datasets to gain greater understanding of how to make the match between trade and human rights effective and enduring. 

In sum, policymakers use these agreements directly (and indirectly) to encourage good governance. (7) Yet, the association of trade and human rights in PTAs is new, unproven, and not well understood. In that sense, it is a “shot-gun wedding.” We hope to encourage other scholars to examine if this marriage is effective and enduring.

 

Human Rights in Preferential Trade Agreements:  Comparing EFTA, EU, US, Canada  

Country/Right

EFTA

EU

US

Canada

Strategy

Universal human rights

Universal human rights and specific rights

Specific human rights

Specific human rights

Which Rights?

 

Labor  rights, transparency, due process, political participation, and privacy rights

Transparency, due process, political participation, access to affordable medicines, and labor rights.

Transparency, due process, political participation, labor rights, privacy rights, cultural and indigenous rights

How Enforced?

No enforcement

Human rights violations lead to dialogue and possible suspension depending on nature of violation.

 In newest agreements, labor rights can be disputed under dispute settlement body affiliated with the agreement. Process begins with bilateral dialogue to resolve issues.

Only labor rights (monetary penalties). Use dialogue first.

Any challenge?

 

 

First challenge-Guatemala
Review of Jordan.

 

Examples of Human Rights Embedded in Preferential Trade Agreements

Human rights

Labor

Democratic Rights

Access to Affordable Medicines

Right to cultural participation

Freedom of movement

Indigenous rights

Political
Participation

Privacy

Countries

Canada

Mercosur

Costa Rica

Canada

EFTA

Canada

Canada

Canada

 

Chile

 

US

NZ

EEA

NZ

US

EU

 

Mercosur

 

 

 

Caricom

Australia

 

 

 

US

 

 

 

 

 

 

 

 

NZ

 

 

 

 

 

 

 

  

Notes:
1.
Susan Ariel Aaronson is Associate Research Professor, the Elliott School, George Washington University, and Research Fellow, World Trade Institute. She is the author (with Jamie Zimmerman) of Trade Imbalance: The Struggle to Weigh Human Rights in Trade Policymaking (Cambridge: 2007). Jean-Pierre Chauffour is Lead Economist, International Trade Department, World Bank. He is the author of The Power of Freedom: Uniting Development and Human Rights (Cato 2009). The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. back to text
2.P. Bidwell, The Invisible Tariff: A Study of the Control of Imports into the United States (NY: Council on Foreign Relations, 1939), 11-115. back to text
3.The US has human rights language in all of its PTAs except US-Israel (17 in force; 3 pending) and in its generalized system of preferences (GSP) with 131 countries. The EU has PTAs with 14 countries of which 13 have human rights provisions, some 120 countries are subject to human rights provisions in its GSP. If we add the US FTAs –Israel to the GSP 131 plus 16=147. 147/ 195 the number of countries in the world, we get 75%. back to text
4For a summary of arguments for or against including human rights in PTAs, see F. van Hees, “Protection v. Protectionism, “The Use of Human Rights Arguments in the Debate for and Against the Liberalization of Trade, Abo 2004, at http://web.abo.fi/instut/imr/norfa/floris.pdf. back to text
5. .S. A.Aaronson (2011). “Human Rights” in J-P Chauffour and J-C Maur (eds). Preferential Trade Agreements Policies for Development: A Handbook, World Bank, April 2011. back to text
6.J-P Chauffour and J-C Maur (2010). “Beyond Market Access: The New Normal of Preferential Trade Agreements”, World Bank Policy Research Working Paper No. 5454. back to text
7.On human rights spillovers of PTAs, see E. Hafner Burton, “Trading Human Rights: How Preferential Trade Agreements Influence Government Repression,” International Organization, 59 (3): 593-629 and M. J. Ferrantino, “Policy Anchors: Do Free Trade Agreements and WTO Accessions Serve as Vehicles for Developing Country Policy Reform? US-ITC Office of Economics Working Papers 2006-04-A ; on WTO human rights spillovers, see S.A. Aaronson and M. R. Abouharb, “Unexpected Bedfellows: The GATT, the WTO and Some Democratic Rights,” International Studies Quarterly, June 2011; S. A.Aaronson, Seeping in Slowly: How Human Rights are Penetrating the WTO,”WorldTrade Review, :3, 413-449; and R. O. Keohane et al., “Democracy-Enhancing Multilateralism,” International Organization, 63, 1-31. back to text

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S. A. Aaronson
Aaronson is Associate Research Professor of International Affairs, Elliott School, George Washington University and Research Fellow, World Trade Institute Bern. She is the author of 6 books including Trade Imbalance, the Struggle to Weigh Human Rights in Trade Policymaking (Cambridge: 2007) and Taking Trade to the Streets (Michigan and numerous articles on trade, human rights, corruption, EITI, business and human rights, and public understanding of globalization.  Aaronson is also a frequent commentator on trade and globalization issues.

J-P. Chauffour
Mr. Chauffour is Lead economist in the World Bank’s International Trade Department, where he works on regionalism, competitiveness, and trade policy issues. Prior to joining the Bank in 2007, he spent 15 years at the IMF, where he held various positions, including mission chief in the African Department and representative to the WTO and UN in Geneva. Mr. Chauffour has extensive economic policy experience and has worked in many areas of the developing world, most extensively in Africa, the Middle East, and Eastern Europe. He holds a Master in Economics and a Master in Money, Banking, and Finance from the Panthéon-Sorbonne University in Paris. He is the author of “The Power of Freedom: Uniting Human Rights and Development” (Cato, 2009).

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