In the Zone: Work at the Intersection of Trade and Migration

Abstract

Trade and immigration are generally described as separate dimensions of globalization. This Article challenges that story by focusing on settings where states and private actors are bringing the two together to achieve disparate economic and policy goals. In one set of cases analyzed here, governments in the Global South are seeking to increase trade through the use of migrant labor, attracting transnational firms to export manufacturing zones by importing lower-cost workers from other countries. In the other, policymakers in the Global North are seeking to decrease immigration through the use of trade by investing in export processing zones in migrant origin countries, on the theory that more trade, and the employment it creates, will deter onward migration to the Global North.

I use these contexts as the starting point for a reconsideration of core ideas in trade and migration policy and theory. In the first cases, governments are constructing a comparative advantage in labor from whole cloth, by bringing in workers from other countries on terms that restrict their freedom and subject them to exploitation at work. This challenges the usual description in the trade literature of labor cost as a natural phenomenon based on local wage and productivity levels, and thus a legitimate source of advantage in trade. Meanwhile, transnational firms that locate production in these zones sidestep the ordinary choice between benefitting from global wage differentials by moving work overseas or by hiring migrant workers. Instead, they do both simultaneously, a strategy I term “double labor arbitrage.” I explore the ways that construction of comparative advantage and double labor arbitrage operate together to extract additional value from workers for the benefit of states and corporations. With regard to the second set of cases, I draw on recent empirical economic scholarship to challenge the argument that more trade will decrease emigration. More profoundly, I question the normative justification for these proposals, given the treatment of workers in the zones. Although proposed as a “solution” to immigration, I argue that they are much more likely to deepen the problems that drive it.

Immigration and trade law do not bar any of the developments I analyze here. The question is whether they should. This article—the first step in a larger project—launches that inquiry.

Keywords: Immigration, Trade, Labor Rights

JEL Classification: J15, J16, J61, J83, O24, P45, F13, F16, F22, F66