The Legality of Trade Sanctions based on Human Rights Violations: an analysis through Law and Economics

Abstract

Are states entitled to take unilateral or collective trade measures in cases of extraterritorial human rights violations? The debate is often blurred by a multitude of legal, political, economic, and moral arguments that have produced misunderstandings. While exploring the above issue, this paper unfolds in three parts. First, using traditional legal analysis, I demonstrate that states have not embraced any robust doctrine permitting states to apply restrictive trade measures as countermeasures against human rights violations abroad. Second, I use the framework of allocation of regulatory jurisdiction (ARJ) and its respective costs (sovereignty and cognitive) to explain why the rules across those doctrinal branches reach the same end point. Third, I argue that, because of those costs, human rights advocacy in connection with international trade gains traction in other ways, such as voluntary codes of conduct, social certification, and labeling.