Labour Standards and Mega-Regionals: Innovative Rule-Making or Sticking to the Boilerplate? IEL Working Paper 03/2017

The requirement to adopt minimum labour standards is now standard practice in free trade agreements negotiated by major trading powers such as the EU and US. However, such practice has historically been contested by developing countries, who contend that the requirement to increase labour and social protection standards is designed to remove one of the few competitive advantages that developing countries have over developed countries in attracting foreign investment. More recently, the EU and the US have also sought to use so-called ‘mega-regionals’ to promote labour standards. This was a significant development in that their proponents were keen to stress that these agreements would set the benchmark for labour protection provisions in FTAs, readily admitting that one of the central aims pursued by such agreements was to redefine the rules of the global trading system. The paper aims to assess the labour standards provisions included in EU and US FTAs, determine the rationale behind the inclusion of such provisions, and examine the extent to which mega-regionals such as the TTIP and the TPP marked a significant departure from past practice.