Poverty Everywhere Endangers Prosperity Everywhere: Trade Agreements and Labour Rights Protection

Historically, International Labour Law was developed to mitigate the negative social externalities of the Industrial Revolution and protect international trade from unfair competition. With a similar objective, the international community failed to establish the International Trade Organisation provided for in the 1948 Havana Charter. In its place, the General Agreement on Tariffs and Trade (GATT) was adopted. However, the Havana Charter remains the first universal trade treaty to include a social clause. During the Cold War, Western countries failed to introduce a social clause in the GATT. The most resounding failure was in the 1990s when the World Trade Organisation (WTO) was created. This failure drove Western countries to introduce social clauses in bilateral and non-universal multilateral trade agreements. Since the 2000s there has been a ‘boom’ of new social clauses. These clauses have developed into two main models: the conditional model and the cooperative (or promotional) model. The former model is typical of the US, the latter of the EU. The US and EU clauses have four characteristics and structural elements: social obligations, procedural commitments, implementation mechanisms and dispute settlement mechanisms. The main difference between the two types of social clauses lies in the presence (US model) or absence (EU model) of sanctions for breach of obligations. The research question of this dissertation concerns the legal efficacy of social clauses. First, the research reconstructs the historical-legal background and conceptualises social clauses. Second, the study compares the EU and US models from a legal-historical perspective. Third, the dissertation comparatively assesses two fundamental (and so far unique) cases for breach of social obligations: the US v. Guatemala case and the EU v. Republic of Korea case.