Trade Agreements Blog

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Critics of trade agreements often claim that by greenlighting free trade, labor standards decrease. Their reasoning is that, in the rush to produce the cheapest possible product, the workers rights and safety are sacrificed.

According to VoxEU.org, a collection of European economists that analyze public policy, evidence supports the contrary of the ‘conventional wisdom.’ According to their research, labor standards actually rose while tariffs dropped from 1880-1913 – one of the most dangerous times for factory workers. This indicates increased trade and minimal tariffs help workers, rather than put them at risk as trade agreement opponents claim.

Michael Huberman & Christopher M. Meissner © voxEU.org

“The historical record we have uncovered strongly challenges the sceptics’ views (Huberman and Meissner, 2009). Our research suggests that ensuring market access decreases the costs of adopting labour standards. Greater trade links provide greater incentive to raise labour standards. Figure 1 summarises our evidence.

I would love to see similar statistics and analysis from additional eras and world regions  – for example post-WWII and especially the evidence in the US, Mexico, and Canada since the implementation of NAFTA.

Read the complete article at VoxEU.org: “New evidence on the rise of trade and social protection.”