Harmonization of labour policies under trade liberalization

The pressures for the harmonization of labor laws and policies under trade liberalization are outlined, with particular attention to inter-jurisdictional competition for investment and jobs. This is followed by an analysis of the linkages that are necessary for there to be downward harmonization, with some discussion of the empirical evidence (and lack of evidence) on those linkages. Opposing pressures towards divergence and away from convergence and harmonization are also discussed. The paper concludes with some observations on the advantages and disadvantages of harmonization and the appropriate policy responses.