European integration and labour market cooperation: a comparative regional perspective

National economies around the world are becoming increasingly integrated. While regional integration offers opportunities for mutual gain, it also fosters distributional consequences, thus creating economic and political risks for governments. Governments pursue different strategies for coping with risk. The first strategy is protectionism. A second strategy is to link economic openness with the provision of domestic compensation. A final strategy is for nations to develop mechanisms to coordinate rules, norms, or principles to govern working conditions and industrial relations. The political conflict between nations at different stages of economic development, and the regional responses in the EU, NAFTA, MERCOSUR, and ASEAN all follow a similar pattern, with the more advanced economies pressing for some harmonization that would moderate the competitive advantages of developing countries. Given this cleavage, various compromises have been struck, which confirmed national policy control but also amounted to an incremental convergence toward common minimum standards.