Trade agreements significantly influence domestic labor policies by setting standards for wages, working conditions, and employment rights. Such agreements can create competitive pressures that affect how countries manage their labor forces and may lead to either enhanced protections for workers or, conversely, exploitation. For instance, a trade agreement might incentivize companies to outsource labor to nations with weaker regulations, impacting local employment. On the flip side, agreements can also encourage investment in labor rights initiatives, promoting stronger standards for workers domestically and abroad.