The Impact of Due Diligence Legislation on International Trade and Business: An Analysis of Potential Trade-Offs

In today's interconnected world, navigating the intricate landscape of due diligence legislation is more crucial than ever for balancing ethical goals with economic impacts.

Our latest working paper dives into the complexities of due diligence legislation, aiming to bolster human rights, labor standards, and environmental sustainability. While these laws target vital moral and political objectives, they also bring significant costs that might deter investment and trade. The authors analyze 60 cases to investigate these laws' impact on international trade and business and highlight unintended consequences like investor withdrawal, reduced trade in strategic commodities, and compliance costs affecting competitiveness. Are these laws crafted well enough to achieve their goals without adverse effects? We invite you to engage in the conversation and share your thoughts on how we can harmonize ethical goals with economic realities. 

About the authors: 

Peter Draper is Executive Director of the Institute for International Trade, and Jean Monnet Professor of Trade and Environment, at the University of Adelaide.

Andreas Freytag is a professor of economics at the Friedrich-Schiller-University Jena, a Visiting Professor at the IIT Adelaide, and an Honorary Professor at Stellenbosch University. He is associated with a number of think tanks world-wide and a director of Tutwa Europe, a consultancy company.

Dr Naoise McDonagh is Senior Lecturer in International Business, School of Business & Law, Edith Cowan University, managing editor of the journal Law & Geoeconomics, and holds membership with the Geoeconomic Society and the Australian Institute of Company Directors.

Matthias Menter is a Professor of Business Dynamics, Innovation and Economic Change at the Friedrich Schiller University Jena, Germany and a Research Fellow at the Institute for Development Strategies at the School of Public and Environmental Affairs at Indiana University, USA. He further serves as an editor of the journal Small Business.

ACCESS FULL WORKING PAPER HERE