Protecting Workers Abroad and Industries at Home: Rights-based Conditionality in Trade Preference Programs

Abstract

A growing number of developed country governments link good governance, including human rights, to developing countries’ access to aid, trade, and investment. We consider whether governments enforce these conditions sincerely, in response to rights violations, or whether such conditions might instead be used as a veil for protectionist policies, motivated by domestic concerns about import competition. We do so via an examination of the world’s most important unilateral trade preference program, the US Generalized System of Preferences (GSP), which includes worker rights as one criterion for program access. We argue that the two-tiered structure of the GSP privileges some domestic interests at one level, while disadvantaging them at the other. Using a new data set on all US GSP beneficiary countries and sanctioning measures from 1986 to 2013, we demonstrate that labor rights outcomes play a role in the maintenance of country-level trade benefits and that import competition does not condition the application of rights-based criteria at this level. At the same, however, the US government does not consider worker rights in the elements (at the country-product level) of the program that have the greatest material impact. The result is a situation in which the US government talks somewhat sincerely at the country level in its rights-based conditionality, but its behavior at the country-product level cheapens this talk.