Labor and Trade

Over the past decades, trade and financial flows have played an increasingly important role in the world economy by contributing significantly to economic growth both at the global level and within individual countries. However, trade and financial openness increase interdependence and therefore expose countries, workers and businesses to external shocks and volatility with possibly severe consequences for employment, as illustrated during the recent global financial and economic crisis.

The greater interconnectedness and openness of the world provides opportunities for employment generation and improvement of working conditions. This interconnectedness also poses challenges for a more equitable distribution of resources and inclusive growth. The design and implementation of solutions to these challenges deserve ILO’s continuous attention.

Trade and foreign investment have important effects on employment and labor market conditions. Fostering fair working conditions and respecting the rights of workers are crucial for ensuring that workers benefit from trade and openness. The challenge is to better understand how trade and investment policy options affect decent work opportunities and to assist policy makers at global and national levels to design policy solutions that optimize the positive effects of trade and finance on employment. The ILO is working with our constituents to expand these opportunities and address these challenges.

The ILO emphasizes the need for trade and financial flows to take place within a well-regulated global framework. Effective crisis management also requires strong social dialogue between employers, workers and governments. The ILO is working to increase knowledge and understanding of the social and economic impacts of globalization to assist in the formulation of effective national employment strategies.

The US Promotes Labor Standards in Trade Agreements

The United States has over time built a framework for promoting labor rights and improved livelihoods through trade preference programs and free trade agreements (FTAs). Since 1984, the US laws governing trade preference programs have required that developing countries take steps to ensure respect for internationally recognized workers’ rights. The labor chapters in FTAs with the United States incorporate references to the countries’ obligations as members of the ILO and commitments under the 1998 ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up.

In May 2007, a Congressional-Executive agreement was signed to incorporate high labor standards into US trade agreements. Viewing trade as a tool for enhancing labor protections and combating poverty, the Obama Administration has reaffirmed the United States’ commitment to worker protection and labor rights. The Administration has continued efforts to monitor and enforce labor provisions contained in US trade agreements to ensure that workers and their families around the world benefit from trade.

The Administration is actively seeking trade partnerships that will create jobs in the United States, increase U.S. exports, and strengthen worker protections abroad. Currently, it is working with Colombia, Guatemala, Bahrain, Jordan, the Dominican Republic, Honduras and others to address labor issues under the respective trade agreements.


  1. Joint Statement

    New initiative to improve labor rights in Myanmar

    November 14, 2014

    The Republic of the Union of Myanmar, the United States of America, Japan, Denmark and the International Labour Organization (ILO) today are jointly launching a new Initiative to Promote Fundamental Labor Rights and Practices in Myanmar. The Initiative is intended to build upon Myanmar's existing labor reform efforts, including ongoing legislative reform activities supported by the ILO.

    1. The full statement can be found here
    2. Fact Sheet: U.S. assistance to Burma
    3. Fact Sheet: New Initiative to improve labor rights in Myanmar

  2. US Department of Labor hosts first Labor Affairs Council meeting under US-Colombia Trade Promotion Agreement

    June 5, 2013

    At the meeting, officials reaffirmed their commitments under the Labor Chapter and discussed possible areas for future cooperation, efforts of the new Colombian Ministry of Labor to strengthen institutional capacity and labor law enforcement, and ongoing areas of particular concern.

    The joint statement is available here.
  3. U.S.-Bahrain Trade Agreement

    United States Seeks to Protect Worker Rights under U.S.-Bahrain Trade Agreement

    May 7, 2013

  4. Labor enforcement

    Guatemala Labor Action Plan under CAFTA-DR

    April 11, 2013

    The United States and Guatemala have agreed on a robust plan to resolve labor law enforcement concerns.

  5. U.S.-Panama Trade Promotion Agreement enters into force; reaffirms parties' obligations to ILO's fundamental labor rights

    October 31, 2012

    The TPA, which took effect October 31, 2012, establishes provisions to further strengthen labor laws and their enforcement as well as to protect workers' rights.