Labour Standards Provisions in International Trade Policy: An International Business Perspective

Decent work, part of Sustainable Development Goal (SDG) 8, remains a daunting challenge for international business (IB). This chapter takes an IB perspective on the role of labour standards provisions (often referred to as “social clauses”) in international trade policy. Such provisions aim to improve labour standards in trading partners through trade policy mechanisms. The chapter provides a brief overview of labour standards and discusses the so far failed attempts to include labour standards provisions in multilateral frameworks such as the World Trade Organization (WTO). It describes the ensuing trend of instead including such standards in regional and bilateral free trade agreements. Some theory and evidence from research literature on labour provisions is presented. The chapter concludes by outlining some promising research avenues for IB related to labour provisions in trade policy.