Human rights and governance provisions in OECD country trade agreements with developing countries

Question

Succinctly map and categorise the types of governance and human rights provisions in OECD country trade agreements (including preferential agreements) with developing countries, noting whether they are voluntary or conditional, and – if relevant - how they are monitored and enforced.

Summary

Trade agreements increasingly feature governance and human rights provisions. Countries taking the lead in this are the United States and Canada (the EU was not covered in this review). However, they tend to be selective in their provisions, focusing in particular on labour rights, transparency and anti-corruption, as well as public participation and intellectual property rights. Labour rights provisions in trade agreements are progressively moving from hortatory to mandatory, but sanctions and enforcement remain weak. Dispute resolution mechanisms are rarely triggered, and even in cases where economic sanctions could be applied this is not done: signing parties generally prefer to engage in dialogue to resolve labour disputes (ILO, 2016). Other governance provisions in trade agreements are usually less binding.

Time constraints meant it was not possible to conduct the primary research (analysis of individual country trade agreements) ideally required to respond to this query. Instead, the review drew on available literature on governance and human rights provisions in trade agreements. Much of the literature is on EU trade agreements; the review was able to find considerable material on the US, and some on Canada and Chile, but there was negligible analysis of these issues in the context of other bilateral agreements.

Key Findings

  • United States – is a leader in promoting labour rights, transparency, due process and anti-corruption in trade agreements. Provisions have become more robust with each new ‘generation’ of trade agreements and anti-corruption measures are now considered to be best practice. As well as including capacity building to strengthen compliance, since 2009 the US has been more active in monitoring and enforcement. However, it has steered clear of promoting universal human rights in its trade agreements.
  • Canada – has generally followed the US in progressively strengthening labour provisions in its trade agreements, as well as embedding transparency and anti-corruption measures. Labour rights chapters are legally binding and failure to comply could lead to fines, but others, e.g. for public participation, are weaker. Like the US, Canada has preferred to focus on specific rights rather than promoting universal human rights.
  • Chile – differs from the US and Canada in not having a discernible pattern or trend with regard to labour rights provisions in its trade agreements. The specific provisions in each treaty depend on negotiations with the concerned partner. Overall, Chile has adopted cooperation as the main approach: its trading agreements tend to have ‘soft obligations’.
  • Other bilateral trading agreements – A brief review of select countries’ trading agreements (notably New Zealand, Australia and Japan) revealed a general lack of stress on governance/human rights provisions. Labour rights tend to be the most commonly found.

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Suggested citation

Idris, I. (2017). Human rights and governance provisions in EU and OECD country trade agreements with developing countries. K4D Helpdesk Report. Brighton, UK: Institute of Development Studies.