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Worker Rights And Global Trade The US Cambodia Bilateral Textile Trade Agreement Case Solution

Solution Id Length Case Author Case Publisher
1981 670 Words (4 Pages) Regina Abrami Harvard Business School : 703034
This solution includes: A Word File A Word File

Although Cambodia made several positive changes during the first year, it failed to meet internationally recognized core labor standards. Hence, 14% quota was not provided. With no partial reward mentioned in the agreement, Cambodian stakeholders got discouraged to further improve the working conditions. Hence, an explicit mention of substantial measures required to meet the standards and partial rewards is necessary for such a purpose.

Following questions are answered in this case study solution

  1. Summary

  2. Benefits of International trade

  3. Cost of International trade

  4. Human rights and International trade

  5. Implementation of the incentive for improvement of working conditions

  6. Consequences of Incentive offered to Cambodia  

  7. Conclusion

Case Analysis for Worker Rights And Global Trade The US Cambodia Bilateral Textile Trade Agreement Case Solution

1. The contribution of US-Cambodia Bilateral Textile Trade Agreement in the improvement in Worker Rights

i. Summary

A crucial cost of trade is the poor working conditions of labor in developing countries. To prevent that US introduced a bilateral agreement with an incentive to increase import quota given improved working conditions. Despite many challenges in implementation, the incentive system has significantly contributed in the improvement of working conditions in Cambodia.

ii. Benefits of International trade

Many advocates of International trade believe that it is essential for efficient allocation of resources and specialization. Trade also increases knowledge sharing. Employment levels also increase and variety of products are available to customers.

Due to decades of war, Cambodia depended on foreign aid to survive. Cambodia struggled to improve trade relations to improve the wealth and economy of the country through international trade. Cambodia specialized in Garment production. One of the major importers for Cambodia was US. 

iii. Cost of International trade

Many countries have experienced the cost of trade because of the environmental and social consequences. 

  • Richer countries gain at the expense developing countries. 

  • Income inequality increases

  • Labor Working conditions in developing countries

  • Environmental problems 

  • Increased dependence on other economies

iv. Human rights and International trade

In order to encourage better working conditions for labor, Embargos and sanctions were imposed on the goods imported from developing countries offering lower wages and poor working conditions and engaging in child labor. Cambodia garment industry was plagued with corruption, violence, strike and sexual harassment. US attempted to improve working conditions in Cambodia by offering an increase in US import quota to 14% if the working conditions. This was to offer incentives to the interest groups in Cambodia to collaborate and improve labor rights. The agreement was signed in beginning of 1999.

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