Labour Clauses in the TPP and TTIP: A Comparison without a Difference?

By Tham, Joo-Cheong; Ewing, K. D. | Melbourne Journal of International Law, December 2016 | Go to article overview

Labour Clauses in the TPP and TTIP: A Comparison without a Difference?


Tham, Joo-Cheong, Ewing, K. D., Melbourne Journal of International Law


This article provides a critical analysis of the labour clauses in trade agreements, including the Trans-Pacific Partnership ('TPP'). This analysis is based on four dimensions of labour clauses in trade agreements: their purposes, the legal nature of the clauses (whether binding or not), the substance of legal obligations imposed and the institutional processes provided for. The analysis is also grounded in the two dominant approaches to these clauses, the European Union and the pre-Trump United States approaches: the former can be understood as proposing a broad agenda based on promotional measures while the latter is underpinned by a narrow agenda based on conditional measures. The TPP's labour clause clearly adopts a pre-Trump US approach and the divergence between the EU and pre-Trump US approaches is highlighted by the labour clauses of the TPP and the proposed Transatlantic Trade and Investment Partnership. However, it is unclear whether this (possible) difference in approach will translates into a difference of impact on domestic labour standards. We argue that, for a number of reasons, there may be a general orientation to non-application of labour clauses in free trade agreements such as the TPP.

Contents

I    A New Era of Labour Protection through Trade?
II   Labour Clauses in Trade Agreements
       A The (Uneven) Increase in Labour Clauses
III  Key Dimensions
     A The EU and US approaches
IV The Labour Clauses in the TPP and TTIP
     A The Labour Chapter of the TPP
         1 Purposes and Obligations
         2 Institutional Processes
         3 An American Approach to Labour Clauses
     B The Labour Chapter of TTIP: State of Negotiations
V  A Formula for Ineffective Labour Standards? (Or Why We Might End Up
   with American Rules)
     A Factors Determining the Impact of Labour Clauses
     B Labour Standards and Inactive State Power
         1 A General Orientation to Non-Application
         2 Non-Application with Neutral Impact
         3 Non-Application with Negative Impact
     C Labour Standards and Active State Power
VI Conclusion

I A New Era of Labour Protection through Trade?

This article tackles the topic of labour clauses in trade agreements through an analysis of the labour clauses of the Trans-Pacific Partnership ('TPP') (1) and the possible labour clauses for the now stalled Transatlantic Trade and Investment Partnership ('TTIP') between the European Union and the United States. (2) Both are key instances of 'mega-regional trade agreements'--the term the World Bank has adopted for 'regional agreements that have systemic, global impact'. (3) And in both cases, labour clauses have assumed significant importance. The European Commission proposed a chapter on 'trade and sustainable development' for TTIP--which centrally includes labour clauses--that it says 'offers the most ambitious provisions ever put forward on these issues to any trading partner'. (4) Referring to the labour clauses in TTIP, the United States government has said that:

   The United States and Europe already maintain high levels of
   protection for their workers. T-TIP should reflect this shared
   commitment, which may become a model for others to follow, and
   encourage even greater transatlantic cooperation. (5)

For its part, the Labour Chapter of the TPP is the most significant labour clause in a trade agreement concluded to date. After five years of negotiation, the TPP was concluded on 4 October 2015 amongst 12 countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam) representing 40 per cent of global GDP. (5) The TPP is significant not only for the amount of global trade and investment it (potentially) covers, but the approach it is said to have adopted in relation to international trade. Critics noted the significance of the TPP--a trade agreement that has been characterised as 'no ordinary deal' underpinned by a 'neoliberal market model'. …

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