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Human Rights and International Trade: How Depth and Human Rights Performance Shape the Politics of Social Law Design in Preferential Trade Agreements

Lisa Lechner

Even though human rights clauses are increasingly included in preferential trade agreements (PTAs), not all PTAs contain social law. What accounts for this variation? We still know relatively little about what explains the inclusion of social law in trade agreements. Seeking to fill this gap, this paper proposes a theoretical argument that stresses the selection process. The argument is that stakeholders - such as multinational firms, voters, NGOs and governments - respect and comply with clauses, which are not in their favor, in order to receive the benefits of other provisions included in the PTA. This is only the case, if their expected losses are inferior to their expected gains or if the opposed parties have superior bargaining power. Due to this trade-off, the selection of human rights is interdependent with other design features of the agreement. In particular, it is expected that deep agreements are more likely to include social law. The chance of human rights provisions in a PTA increases, if an in-design-similar PTA contained such provisions as well. This is especially the case for EU-PTAs. Assuming the actors are risk averse, the relationship between the probability of being selected as a member of a PTA, which refers to social law, and the human rights performance is positive up to an optimum level and negative beyond this peak (inverse u-curve). A time-series-dataset on the design of trade agreements signed between 1957 and 2009 allows testing the arguments. Descriptive evidence and probit regressions support all the theoretical expectations.

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