Abstract

Various advocacy groups and primarily domestic-focused firms in developed countries have been pushing governments to include a "social clause" in trade treaties with less developed countries. Such a clause is designed to link trading access to markets in developed countries with improvements in working conditions in poor nations. The implications of such a clause for internationally-focused firms and how managers can effectively deal with human rights issues in their foreign operations are examined. Various constituencies in this debate are identified and an integrated response system on the part of firms is presented. It is suggested that the best policy for firms to adopt would be to acknowledge the relevance of the social clause in today's global economy and work closely with the various advocacy groups to ensure continuing public support while avoiding overly restrictive clauses in international trading agreements.