Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269481 
Year of Publication: 
2017
Series/Report no.: 
FERDI Working Paper No. P200
Publisher: 
Fondation pour les études et recherches sur le développement international (FERDI), Clermont-Ferrand
Abstract: 
We explore the impact on bilateral trade flows of the inclusion of a labor clause (LC) in Trade Agreements (TAs). Using a gravity type framework, we find that the introduction of LCs has on average no impact on bilateral trade flows. However, there is some interesting heterogeneity. Exports of low-income countries benefit from the introduction of LCs in North-South trade agreements. Interestingly, the impact is stronger when accompanied by deep cooperation. On the other hand, stronger enforcement mechanisms, at best, marginally reinforce the impact of LCs. The results are clearly inconsistent with the idea that LC are set for protectionist reasons, casting doubt on the reluctance by low-income countries to include labor clauses in their trade agreements. Key Words: Labor Clause, Free Trade Agreements, Gravity Equation
Subjects: 
Labor Clause
Free Trade Agreements
Gravity Equation
JEL: 
F16
Document Type: 
Working Paper

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