An Analysis of the Relative Effectiveness of Social and Environmental Norms in Free Trade Agreements

While Free Trade Agreements (FTAs) of both, the United States and the European Union, include labor issues in specific chapters, only US FTAs explicitly have “labor chapters,” while the EU FTAs have a general reference to labor rights through the human rights clause and otherwise refer to labor issues in chapters on “social aspects”. Clearly, the US prioritizes labour issues over general human rights or social concerns, while the EU has a broader focus, embracing human rights and sustainable development issues. Based on congressional and civil society pressure, the US also provides clear avenues for sanctions, making labor issues actionable under regular dispute settlement processes. In contrast, the EU adopts a more nuanced approach, signalling a preference against sanctions and for dialogue and capacitybuilding. The EU social chapters are not enforceable. However, even though US labour provisions are more focused and subject to regular dispute settlement processes, the language of these respective paragraphs used to be rather vague. In addition, avoiding enforcement through sanctions is clearly also the preference of subsequent US administrations, and thus, in the end the enforcement performance of the two is not very different. [...]