Integrative Linkage: Combining Public and Private Regulatory Approaches in the Design of Trade and Labor Regimes

Abstract

One of the most contentious issues in the debate over trade liberalization concerns whether, and how, labor rights provisions should be incorporated into free trade agreements (FTAs). The predominant approach to crafting these provisions has been what might be termed a State Action-State Sanctions Model, in which sanctions are threatened if domestic labor law is poor, or inadequately enforced. Yet in light of the fact that developing countries often have highly dysfunctional labor regulatory systems, and in light of the insights provided by recent scholarship on regulatory theory and international governance, such a state-centric focus is misguided. This article therefore argues for a new approach to the design of labor rights provisions in trade agreements called Integrative Linkage (IL). An IL approach simultaneously recognizes the increasingly important role of private regulatory regimes in the enforcement of workers' rights, and at the same time seeks to develop well-functioning, democratically accountable public labor regulation regimes. Using an ILO led labor rights experiment in Cambodia as an instructive case study, the article develops a set of principles and mechanisms that might guide policymakers in crafting specific IL regimes to achieve these goals.

Keywords: international trade, development, labor, human rights, new governance, regulatory theory, developing countries, law and development

JEL Classification: K31, K33, O19