Architectural Digest for International Trade and Labor Law: Regional Free Trade Agreements and Minimum Criteria for Enforceable Social Clauses

Until the advent of binding “social clauses” in free trade arrangements, and incorporation of stronger social rights in the European Community treaties, the rapid widening and deepening of international commercial integration proceeded largely separate from international labor rights obligations. Inclusion of a “social clause” in a trade agreement ensures that the parties´ international labor rights commitments have equal dignity and binding force with their trade obligations. The threat of economic sanction for non-observance of labor commitments akin to the penalties for trade rule violations also may provide some “teeth” to induce compliance, unlike the lack of economic sanctions for violation of formally binding ILO and international human rights-based labor provisions. The implicit domestic political promise of trade negotiators, however, is that the social clause will operate as a circuit breaker in the feared downward spiral of domestic labor standards under pressure of free trade; the social clause functions as a political quid pro quo for trade liberalization. This paper argues that this bargain is largely illusory. Neither the typical human rights “naming and shaming” solution nor the usual national government-centered enforcement machinery provides realistic mechanisms to induce party-state compliance in the labor rights arena. The real parties in interest – employers, trade unions, and workers – are too disconnected from the international institutional process in most international regimes. Those benefiting through a form of unjust enrichment by a signatory country´s violations of its international labor commitments are institutionally insulated from any corresponding liability. Those suffering injury are institutionally excluded from ability to enforce the international obligations, and have no claim to recover compensation for their injuries caused by the government´s breach. The EU might provide a source of useful models for improving institutional arrangements and remedies, so as to ensure that “effective enforcement” becomes a meaningful term. Government reluctance to yield its sovereign control over the politically and economically delicate subject area of labor rights, however, presents an obdurate barrier to movement in this direction